002785.SZ WACC - Weighted Average Cost of Capital
The WACC of Xiamen Wanli Stone Stock Co Ltd (002785.SZ) is 7.6%.
| Range | Selected | |
| Cost of equity | 5.9% - 9.6% | 7.75% |
| Tax rate | 13.6% - 18.2% | 15.9% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 9.5% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.52 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 9.6% |
| Tax rate | 13.6% | 18.2% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 9.5% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002785.SZ | Xiamen Wanli Stone Stock Co Ltd | 0.03 | 0.88 | 0.85 |
| 000877.SZ | Xinjiang Tianshan Cement Co Ltd | 4.03 | 1.36 | 0.31 |
| 002671.SZ | Shandong Longquan Pipeline Engineering Co Ltd | 0.37 | 0.86 | 0.65 |
| 1252.HK | China Tianrui Group Cement Co Ltd | 14.96 | 0.06 | 0 |
| 1847.HK | YCIH Green High Performance Concrete Co Ltd | 13.5 | 0.06 | 0 |
| 300234.SZ | Zhejiang Kaier New Materials Co Ltd | 0.01 | 1.26 | 1.25 |
| 600539.SS | Taiyuan Lionhead Cement Co Ltd | 0.02 | 1.72 | 1.69 |
| 600883.SS | Yunnan Bowin Technology Industry Co Ltd | 0 | 1.03 | 1.03 |
| 6193.HK | Tailam Tech Construction Holdings Ltd | 0 | 0.18 | 0.18 |
| 695.HK | Dongwu Cement International Ltd | 0.23 | 0.3 | 0.25 |
| Low | High | |
| Unlevered beta | 0.28 | 0.73 |
| Relevered beta | 0.28 | 0.75 |
| Adjusted relevered beta | 0.52 | 0.83 |
002785.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 002785.SZ:
cost_of_equity (7.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.52) + 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.