300405.SZ WACC - Weighted Average Cost of Capital
The WACC of Liaoning Kelong Fine Chemical Inc (300405.SZ) is 8.1%.
| Range | Selected | |
| Cost of equity | 7.3% - 11.1% | 9.2% |
| Tax rate | 14.9% - 19.6% | 17.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.6% - 9.5% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.76 | 1.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 11.1% |
| Tax rate | 14.9% | 19.6% |
| Debt/Equity ratio | 0.29 | 0.29 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.6% | 9.5% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 300405.SZ | Liaoning Kelong Fine Chemical Inc | 0.29 | 1.44 | 1.16 |
| 1861.HK | Precious Dragon Technology Holdings Ltd | 0.07 | 0.08 | 0.07 |
| 300325.SZ | Jiangsu Dewei Advanced Materials Co Ltd | 8.14 | 0.62 | 0.08 |
| 300644.SZ | Nanjing Julong Science & Technology Co Ltd | 0.31 | 1.36 | 1.08 |
| 603663.SS | Sanxiang Advanced Materials Co Ltd | 0.04 | 0.87 | 0.84 |
| 603683.SS | Shanghai Smith Adhesive New Material Co Ltd | 0.13 | 0.97 | 0.88 |
| 603790.SS | Argus Shanghai Textile Chemicals Co Ltd | 0.05 | 0.81 | 0.78 |
| 603798.SS | Qingdao Copton Technology Co Ltd | 0.03 | 1.06 | 1.03 |
| 603991.SS | Shanghai Original Advanced Compounds Co Ltd | 0.03 | 0.13 | 0.13 |
| 954.HK | Changmao Biochemical Engineering Co Ltd | 3.63 | -0.06 | -0.01 |
| Low | High | |
| Unlevered beta | 0.52 | 0.85 |
| Relevered beta | 0.64 | 1.06 |
| Adjusted relevered beta | 0.76 | 1.04 |
300405.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 300405.SZ:
cost_of_equity (9.20%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.76) + 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.