455.HK WACC - Weighted Average Cost of Capital
The WACC of Tianda Pharmaceuticals Ltd (455.HK) is 5.7%.
| Range | Selected | |
| Cost of equity | 5.1% - 6.8% | 5.95% |
| Tax rate | 6.8% - 9.8% | 8.3% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.7% - 6.7% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.37 | 0.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 6.8% |
| Tax rate | 6.8% | 9.8% |
| Debt/Equity ratio | 0.38 | 0.38 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.7% | 6.7% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 455.HK | Tianda Pharmaceuticals Ltd | 0.38 | 0.39 | 0.29 |
| 002800.KQ | Sinsin Pharmaceutical Co Ltd | 0.5 | 0.27 | 0.18 |
| 009300.KQ | Sam-A Pharm Co Ltd | 0.12 | 0.05 | 0.05 |
| 018680.KQ | Seoul Pharma Co Ltd | 0.43 | 0.01 | 0.01 |
| 1498.HK | PuraPharm Corp Ltd | 1.91 | 0.35 | 0.13 |
| 1889.HK | Sanai Health Industry Group Company Ltd | 0.86 | 0.07 | 0.04 |
| 239.HK | Pak Fah Yeow International Ltd | 0.01 | -0.21 | -0.21 |
| 2633.HK | Jacobson Pharma Corporation Ltd | 0.31 | 0.1 | 0.08 |
| 858.HK | Extrawell Pharmaceutical Holdings Ltd | 1.01 | 0.58 | 0.3 |
| 897.HK | Wai Yuen Tong Medicine Holdings Ltd | 1.51 | -0.06 | -0.02 |
| Low | High | |
| Unlevered beta | 0.04 | 0.1 |
| Relevered beta | 0.06 | 0.13 |
| Adjusted relevered beta | 0.37 | 0.42 |
455.HK'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 455.HK:
cost_of_equity (5.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.