2002.HK WACC - Weighted Average Cost of Capital

The WACC of China Sunshine Paper Holdings Co Ltd (2002.HK) is 7.6%.

The Cost of Equity of China Sunshine Paper Holdings Co Ltd (2002.HK) is 20.30%.

The Cost of Debt of China Sunshine Paper Holdings Co Ltd (2002.HK) is 4.55%.

	Range	Selected
Cost of equity	17.50% - 23.10%	20.30%
Tax rate	26.10% - 27.90%	27.00%
Cost of debt	4.00% - 5.10%	4.55%
WACC	6.6% - 8.6%	7.6%

WACC

2002.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.45	2.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.50%	23.10%

Tax rate	26.10%	27.90%
Debt/Equity ratio	2.97	2.97
Cost of debt	4.00%	5.10%

After-tax WACC	6.6%	8.6%


Selected WACC	7.6%

2002.HK'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 2002.HK:

cost_of_equity (20.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.45) + 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.