300089.SZ WACC - Weighted Average Cost of Capital

The WACC of Great Wall of Culture Group Holding Co Ltd Guangdong (300089.SZ) is 7.1%.

The Cost of Equity of Great Wall of Culture Group Holding Co Ltd Guangdong (300089.SZ) is 30.30%.

The Cost of Debt of Great Wall of Culture Group Holding Co Ltd Guangdong (300089.SZ) is 5.00%.

	Range	Selected
Cost of equity	25.30% - 35.30%	30.30%
Tax rate	0.30% - 0.40%	0.35%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.7% - 7.5%	7.1%

WACC

300089.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	3.69	4.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	25.30%	35.30%

Tax rate	0.30%	0.40%
Debt/Equity ratio	10.91	10.91
Cost of debt	5.00%	5.00%

After-tax WACC	6.7%	7.5%


Selected WACC	7.1%

300089.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 300089.SZ:

cost_of_equity (30.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (3.69) + 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.