300381.SZ
Guangdong VTR Bio-Tech Co Ltd
Price:  
7.9 
CNY
Volume:  
16,455,300
China | Biotechnology

300381.SZ WACC - Weighted Average Cost of Capital

The WACC of Guangdong VTR Bio-Tech Co Ltd (300381.SZ) is 9.9%.

The Cost of Equity of Guangdong VTR Bio-Tech Co Ltd (300381.SZ) is 10.05%.
The Cost of Debt of Guangdong VTR Bio-Tech Co Ltd (300381.SZ) is 5%.

RangeSelected
Cost of equity8.4% - 11.7%10.05%
Tax rate7.4% - 11.1%9.25%
Cost of debt5.0% - 5.0%5%
WACC8.4% - 11.5%9.9%
WACC

300381.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta0.941.13
Additional risk adjustments0.0%0.5%
Cost of equity8.4%11.7%
Tax rate7.4%11.1%
Debt/Equity ratio
0.020.02
Cost of debt5.0%5.0%
After-tax WACC8.4%11.5%
Selected WACC9.9%

300381.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 300381.SZ:

cost_of_equity (10.05%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.94) + 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.