300428.SZ WACC - Weighted Average Cost of Capital

The WACC of Hebei Sitong New Metal Material Co Ltd (300428.SZ) is 11.1%.

The Cost of Equity of Hebei Sitong New Metal Material Co Ltd (300428.SZ) is 16.65%.

The Cost of Debt of Hebei Sitong New Metal Material Co Ltd (300428.SZ) is 5.00%.

	Range	Selected
Cost of equity	14.80% - 18.50%	16.65%
Tax rate	13.70% - 14.20%	13.95%
Cost of debt	5.00% - 5.00%	5.00%
WACC	10.1% - 12.1%	11.1%

WACC

300428.SZ WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.98	2.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.80%	18.50%

Tax rate	13.70%	14.20%
Debt/Equity ratio	0.83	0.83
Cost of debt	5.00%	5.00%

After-tax WACC	10.1%	12.1%


Selected WACC	11.1%

300428.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 300428.SZ:

cost_of_equity (16.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.98) + 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.