The WACC of East Money Information Co Ltd (300059.SZ) is 7.1%.
Range | Selected | |
Cost of equity | 7.0% - 8.9% | 7.95% |
Tax rate | 13.0% - 13.2% | 13.1% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.4% - 7.9% | 7.1% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.7 | 0.73 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.0% | 8.9% |
Tax rate | 13.0% | 13.2% |
Debt/Equity ratio | 0.28 | 0.28 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.4% | 7.9% |
Selected WACC | 7.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300059.SZ | East Money Information Co Ltd | 0.28 | 3.15 | 2.53 |
000166.SZ | Shenwan Hongyuan Group Co Ltd | 2.8 | 1.57 | 0.46 |
000776.SZ | GF Securities Co Ltd | 2.76 | 1.47 | 0.43 |
002736.SZ | Guosen Securities Co Ltd | 2.24 | 1.44 | 0.49 |
1945.HK | Zero2ipo Holdings Inc. | 0.22 | 1.25 | 1.05 |
600837.SS | Haitong Securities Co Ltd | 4.12 | 0.27 | 0.06 |
600999.SS | China Merchants Securities Co Ltd | 2.29 | 1.26 | 0.42 |
601066.SS | China Securities Co Ltd | 1.53 | 1.61 | 0.69 |
601211.SS | Guotai Junan Securities Co Ltd | 1.3 | 0.3 | 0.14 |
601688.SS | Huatai Securities Co Ltd | 1.85 | 1.52 | 0.58 |
601995.SS | China International Capital Corp Ltd | 2.26 | 1.39 | 0.47 |
Low | High | |
Unlevered beta | 0.46 | 0.49 |
Relevered beta | 0.55 | 0.6 |
Adjusted relevered beta | 0.7 | 0.73 |
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 300059.SZ:
cost_of_equity (7.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.7) + 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.