600022.SS WACC - Weighted Average Cost of Capital
The WACC of Shandong Iron and Steel Co Ltd (600022.SS) is 6.4%.
| Range | Selected | |
| Cost of equity | 8.6% - 12.6% | 10.6% |
| Tax rate | 14.3% - 22.5% | 18.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 7.0% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.97 | 1.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 12.6% |
| Tax rate | 14.3% | 22.5% |
| Debt/Equity ratio | 1.82 | 1.82 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 7.0% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600022.SS | Shandong Iron and Steel Co Ltd | 1.82 | 1.13 | 0.46 |
| 000709.SZ | HBIS Co Ltd | 7.26 | 1.26 | 0.19 |
| 000825.SZ | Shanxi Taigang Stainless Steel Co Ltd | 1.06 | 1.34 | 0.73 |
| 000959.SZ | Beijing Shougang Co Ltd | 1.66 | 1.19 | 0.51 |
| 1090.HK | Da Ming International Holdings Ltd | 9.77 | 0.33 | 0.04 |
| 600307.SS | Gansu Jiu Steel Group Hongxing Iron & Steel Co Ltd | 3.5 | 0.88 | 0.23 |
| 600782.SS | Xinyu Iron & Steel Co Ltd | 1.3 | 1.51 | 0.74 |
| 600808.SS | Maanshan Iron & Steel Co Ltd | 1.2 | 1.24 | 0.63 |
| 600985.SS | Huaibei Mining Holdings Co Ltd | 0.3 | 1.21 | 0.97 |
| 601003.SS | Liuzhou Iron & Steel Co Ltd | 3.55 | 1.11 | 0.29 |
| Low | High | |
| Unlevered beta | 0.39 | 0.56 |
| Relevered beta | 0.96 | 1.37 |
| Adjusted relevered beta | 0.97 | 1.25 |
600022.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 600022.SS:
cost_of_equity (10.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.97) + 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.