002905.SZ WACC - Weighted Average Cost of Capital
The WACC of Guangzhou Jinyi Media Corp (002905.SZ) is 8.4%.
| Range | Selected | |
| Cost of equity | 8.6% - 12.7% | 10.65% |
| Tax rate | 2.7% - 3.6% | 3.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.2% - 9.7% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.97 | 1.27 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 12.7% |
| Tax rate | 2.7% | 3.6% |
| Debt/Equity ratio | 0.62 | 0.62 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.2% | 9.7% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002905.SZ | Guangzhou Jinyi Media Corp | 0.62 | 1.37 | 0.86 |
| 000802.SZ | Beijing Jingxi Culture & Tourism Co Ltd | 0.13 | 0.96 | 0.85 |
| 002343.SZ | Ciwen Media Co Ltd | 0.07 | 1.61 | 1.5 |
| 002502.SZ | Dinglong Culture Co Ltd | 0.11 | 1 | 0.9 |
| 1616.HK | Starrise Media Holdings Ltd | 1.64 | 0.06 | 0.02 |
| 1859.HK | China Bright Culture Group | 0.51 | 0.3 | 0.2 |
| 300336.SZ | Shanghai New Culture Media Group Co Ltd | 4.54 | -0.01 | 0 |
| 300528.SZ | Omnijoi Media Corp | 0.27 | 1.76 | 1.4 |
| 601595.SS | Shanghai Film Co Ltd | 0.03 | 1.61 | 1.57 |
| 8368.HK | Creative China Holdings Ltd | 0.07 | 0.11 | 0.1 |
| Low | High | |
| Unlevered beta | 0.59 | 0.87 |
| Relevered beta | 0.96 | 1.4 |
| Adjusted relevered beta | 0.97 | 1.27 |
002905.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 002905.SZ:
cost_of_equity (10.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.97) + 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.