002973.SZ WACC - Weighted Average Cost of Capital
The WACC of QiaoYin City Management Co Ltd (002973.SZ) is 7.1%.
| Range | Selected | |
| Cost of equity | 7.5% - 10.6% | 9.05% |
| Tax rate | 11.0% - 12.1% | 11.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 8.0% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.79 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.5% | 10.6% |
| Tax rate | 11.0% | 12.1% |
| Debt/Equity ratio | 0.74 | 0.74 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 8.0% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002973.SZ | QiaoYin City Management Co Ltd | 0.77 | 1.3 | 0.77 |
| 002672.SZ | Dongjiang Environmental Co Ltd | 1.16 | 1.29 | 0.64 |
| 003027.SZ | Tongxing Environmental Protection Technology Co Ltd | 0.25 | 1 | 0.82 |
| 1253.HK | China Greenland Broad Greenstate Group Co Ltd | 8.57 | 1.03 | 0.12 |
| 300355.SZ | Inner Mongolia M-Grass Ecology and Environment Group Co Ltd | 0.94 | 0.99 | 0.54 |
| 3718.HK | Beijing Enterprises Urban Resources Group Ltd | 2.27 | 0.25 | 0.08 |
| 601200.SS | Shanghai Environment Group Co Ltd | 0.94 | 0.69 | 0.38 |
| 601330.SS | Dynagreen Environmental Protection Group Co Ltd | 1.18 | 0.88 | 0.43 |
| 601827.SS | Chongqing Sanfeng Environment Group Corp Ltd | 0.53 | 0.59 | 0.4 |
| 688156.SS | Road Environment Technology Co Ltd | 0.21 | 1.13 | 0.96 |
| Low | High | |
| Unlevered beta | 0.42 | 0.58 |
| Relevered beta | 0.69 | 0.96 |
| Adjusted relevered beta | 0.79 | 0.97 |
002973.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 002973.SZ:
cost_of_equity (9.05%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.79) + 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.