002910.SZ WACC - Weighted Average Cost of Capital

The WACC of Lanzhou Zhuangyuan Pasture Co Ltd (002910.SZ) is 6.6%.

The Cost of Equity of Lanzhou Zhuangyuan Pasture Co Ltd (002910.SZ) is 7.80%.

The Cost of Debt of Lanzhou Zhuangyuan Pasture Co Ltd (002910.SZ) is 5.00%.

	Range	Selected
Cost of equity	6.40% - 9.20%	7.80%
Tax rate	6.90% - 9.60%	8.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.8% - 7.5%	6.6%

WACC

002910.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.61	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	9.20%

Tax rate	6.90%	9.60%
Debt/Equity ratio	0.57	0.57
Cost of debt	5.00%	5.00%

After-tax WACC	5.8%	7.5%


Selected WACC	6.6%

002910.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 002910.SZ:

cost_of_equity (7.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.61) + 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.