The WACC of Jacobson Pharma Corporation Ltd (2633.HK) is 7.3%.
Range | Selected | |
Cost of equity | 6.4% - 10.5% | 8.45% |
Tax rate | 17.3% - 17.5% | 17.4% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.7% - 8.9% | 7.3% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.59 | 0.95 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.4% | 10.5% |
Tax rate | 17.3% | 17.5% |
Debt/Equity ratio | 0.31 | 0.31 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.7% | 8.9% |
Selected WACC | 7.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2633.HK | Jacobson Pharma Corporation Ltd | 0.31 | 0.1 | 0.08 |
1498.HK | PuraPharm Corp Ltd | 1.91 | 0.35 | 0.13 |
2348.HK | Dawnrays Pharmaceutical (Holdings) Ltd | 0.02 | 0.33 | 0.32 |
300254.SZ | Shanxi C&Y Pharmaceutical Group Co Ltd | 0.21 | 1.35 | 1.16 |
455.HK | Tianda Pharmaceuticals Ltd | 0.38 | 0.39 | 0.29 |
897.HK | Wai Yuen Tong Medicine Holdings Ltd | 1.51 | -0.06 | -0.03 |
950.HK | Lee's Pharmaceutical Holdings Ltd | 0.28 | 0.66 | 0.54 |
HIKAL.NS | Hikal Ltd | 0.17 | 1.34 | 1.18 |
MARKSANS.NS | Marksans Pharma Ltd | 0.01 | 1.85 | 1.84 |
UNICHEMLAB.NS | Unichem Laboratories Ltd | 0.06 | 1.1 | 1.05 |
Low | High | |
Unlevered beta | 0.31 | 0.74 |
Relevered beta | 0.39 | 0.93 |
Adjusted relevered beta | 0.59 | 0.95 |
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 2633.HK:
cost_of_equity (8.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.59) + 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.