002708.SZ WACC - Weighted Average Cost of Capital

The WACC of Changzhou NRB Corp (002708.SZ) is 10.8%.

The Cost of Equity of Changzhou NRB Corp (002708.SZ) is 11.65%.

The Cost of Debt of Changzhou NRB Corp (002708.SZ) is 5.00%.

	Range	Selected
Cost of equity	10.10% - 13.20%	11.65%
Tax rate	4.50% - 11.60%	8.05%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.5% - 12.2%	10.8%

WACC

002708.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.21	1.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	13.20%

Tax rate	4.50%	11.60%
Debt/Equity ratio	0.14	0.14
Cost of debt	5.00%	5.00%

After-tax WACC	9.5%	12.2%


Selected WACC	10.8%

002708.SZ's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 002708.SZ:

cost_of_equity (11.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.21) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.