600010.SS WACC - Weighted Average Cost of Capital
The WACC of Inner Mongolia BaoTou Steel Union Co Ltd (600010.SS) is 7.4%.
| Range | Selected | |
| Cost of equity | 8.3% - 11.3% | 9.8% |
| Tax rate | 16.4% - 41.0% | 28.7% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 8.0% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.92 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.3% | 11.3% |
| Tax rate | 16.4% | 41.0% |
| Debt/Equity ratio | 0.64 | 0.64 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 8.0% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600010.SS | Inner Mongolia BaoTou Steel Union Co Ltd | 0.64 | 1.28 | 0.84 |
| 000761.SZ | Bengang Steel Plates Co Ltd | 1.55 | 1.74 | 0.76 |
| 000825.SZ | Shanxi Taigang Stainless Steel Co Ltd | 1.06 | 1.34 | 0.72 |
| 000959.SZ | Beijing Shougang Co Ltd | 1.66 | 1.19 | 0.5 |
| 600022.SS | Shandong Iron and Steel Co Ltd | 1.82 | 1.13 | 0.45 |
| 600282.SS | Nanjing Iron & Steel Co Ltd | 1.03 | 0.76 | 0.41 |
| 600782.SS | Xinyu Iron & Steel Co Ltd | 1.3 | 1.51 | 0.73 |
| 600808.SS | Maanshan Iron & Steel Co Ltd | 1.2 | 1.24 | 0.62 |
| 600985.SS | Huaibei Mining Holdings Co Ltd | 0.3 | 1.21 | 0.97 |
| 601003.SS | Liuzhou Iron & Steel Co Ltd | 3.55 | 1.11 | 0.28 |
| Low | High | |
| Unlevered beta | 0.57 | 0.72 |
| Relevered beta | 0.88 | 1.1 |
| Adjusted relevered beta | 0.92 | 1.07 |
600010.SS'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 600010.SS:
cost_of_equity (9.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.92) + 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.