002880.SZ WACC - Weighted Average Cost of Capital

The WACC of Shenzhen Weiguang Biological Products Co Ltd (002880.SZ) is 11.9%.

The Cost of Equity of Shenzhen Weiguang Biological Products Co Ltd (002880.SZ) is 12.55%.

The Cost of Debt of Shenzhen Weiguang Biological Products Co Ltd (002880.SZ) is 5.00%.

	Range	Selected
Cost of equity	11.10% - 14.00%	12.55%
Tax rate	12.80% - 13.50%	13.15%
Cost of debt	5.00% - 5.00%	5.00%
WACC	10.6% - 13.2%	11.9%

WACC

002880.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.37	1.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	14.00%

Tax rate	12.80%	13.50%
Debt/Equity ratio	0.08	0.08
Cost of debt	5.00%	5.00%

After-tax WACC	10.6%	13.2%


Selected WACC	11.9%

002880.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 002880.SZ:

cost_of_equity (12.55%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.37) + 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.