The WACC of Yongxing Special Materials Technology Co Ltd (002756.SZ) is 8.9%.
Range | Selected | |
Cost of equity | 7.9% - 10.0% | 8.95% |
Tax rate | 15.7% - 16.5% | 16.1% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.9% - 9.9% | 8.9% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.85 | 0.88 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.9% | 10.0% |
Tax rate | 15.7% | 16.5% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.9% | 9.9% |
Selected WACC | 8.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
002756.SZ | Yongxing Special Materials Technology Co Ltd | 0.01 | 1.33 | 1.32 |
002318.SZ | Zhejiang JIULI Hi-tech Metals Co Ltd | 0.08 | 0.9 | 0.84 |
002392.SZ | Beijing Lirr High-temperature Materials Co Ltd | 0.27 | 0.91 | 0.74 |
002545.SZ | Qingdao East Steel Tower Stock Co Ltd | 0.17 | 0.93 | 0.81 |
600399.SS | Fushun Special Steel Co Ltd | 0.43 | 1.36 | 1 |
600740.SS | ShanXi Coking Co Ltd | 1.08 | 1.14 | 0.6 |
601011.SS | Baotailong New Materials Co Ltd | 0.51 | 1.13 | 0.79 |
605158.SS | Zhejiang Huada New Materials Co Ltd | 1.16 | 1.34 | 0.68 |
688122.SS | Western Superconducting Technologies Co Ltd | 0.11 | 1.35 | 1.24 |
826.HK | Tiangong International Co Ltd | 0.65 | 0.75 | 0.49 |
Low | High | |
Unlevered beta | 0.77 | 0.82 |
Relevered beta | 0.78 | 0.82 |
Adjusted relevered beta | 0.85 | 0.88 |
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 002756.SZ:
cost_of_equity (8.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.85) + 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.