002909.SZ
Guangzhou Jointas Chemical Co Ltd
Price:  
6.30 
CNY
Volume:  
20,900,936.00
China | Chemicals
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002909.SZ WACC - Weighted Average Cost of Capital

The WACC of Guangzhou Jointas Chemical Co Ltd (002909.SZ) is 9.6%.

The Cost of Equity of Guangzhou Jointas Chemical Co Ltd (002909.SZ) is 11.15%.
The Cost of Debt of Guangzhou Jointas Chemical Co Ltd (002909.SZ) is 5.00%.

Range Selected
Cost of equity 9.90% - 12.40% 11.15%
Tax rate 10.70% - 14.40% 12.55%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.6% - 10.5% 9.6%
WACC

002909.SZ WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.17 1.23
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.90% 12.40%
Tax rate 10.70% 14.40%
Debt/Equity ratio 0.3 0.3
Cost of debt 5.00% 5.00%
After-tax WACC 8.6% 10.5%
Selected WACC 9.6%

002909.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 002909.SZ:

cost_of_equity (11.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.17) + 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.