002809.SZ WACC - Weighted Average Cost of Capital

The WACC of Guangdong Redwall New Materials Co Ltd (002809.SZ) is 9.2%.

The Cost of Equity of Guangdong Redwall New Materials Co Ltd (002809.SZ) is 10.60%.

The Cost of Debt of Guangdong Redwall New Materials Co Ltd (002809.SZ) is 5.00%.

	Range	Selected
Cost of equity	9.20% - 12.00%	10.60%
Tax rate	13.60% - 13.90%	13.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.1% - 10.3%	9.2%

WACC

002809.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.06	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.00%

Tax rate	13.60%	13.90%
Debt/Equity ratio	0.27	0.27
Cost of debt	5.00%	5.00%

After-tax WACC	8.1%	10.3%


Selected WACC	9.2%

002809.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 002809.SZ:

cost_of_equity (10.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.06) + 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.