002789.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Jianyi Decoration Group Co Ltd (002789.SZ) is 8.5%.

The Cost of Equity of Shenzhen Jianyi Decoration Group Co Ltd (002789.SZ) is 19.15%.

The Cost of Debt of Shenzhen Jianyi Decoration Group Co Ltd (002789.SZ) is 5.00%.

	Range	Selected
Cost of equity	15.50% - 22.80%	19.15%
Tax rate	10.40% - 13.10%	11.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.5% - 9.4%	8.5%

WACC

002789.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	2.1	2.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.50%	22.80%

Tax rate	10.40%	13.10%
Debt/Equity ratio	2.64	2.64
Cost of debt	5.00%	5.00%

After-tax WACC	7.5%	9.4%


Selected WACC	8.5%

002789.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 002789.SZ:

cost_of_equity (19.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (2.1) + 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.