300591.SZ
Guangdong Wanlima Industry Co Ltd
Price:  
5.91 
CNY
Volume:  
35,803,560
China | Textiles, Apparel & Luxury Goods

300591.SZ WACC - Weighted Average Cost of Capital

The WACC of Guangdong Wanlima Industry Co Ltd (300591.SZ) is 8.6%.

The Cost of Equity of Guangdong Wanlima Industry Co Ltd (300591.SZ) is 8.85%.
The Cost of Debt of Guangdong Wanlima Industry Co Ltd (300591.SZ) is 5%.

RangeSelected
Cost of equity6.9% - 10.8%8.85%
Tax rate3.7% - 5.8%4.75%
Cost of debt5.0% - 5.0%5%
WACC6.8% - 10.4%8.6%
WACC

300591.SZ WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta0.691
Additional risk adjustments0.0%0.5%
Cost of equity6.9%10.8%
Tax rate3.7%5.8%
Debt/Equity ratio
0.070.07
Cost of debt5.0%5.0%
After-tax WACC6.8%10.4%
Selected WACC8.6%

300591.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 300591.SZ:

cost_of_equity (8.85%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.69) + 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.