600027.SS WACC - Weighted Average Cost of Capital
The WACC of Huadian Power International Corp Ltd (600027.SS) is 5.3%.
| Range | Selected | |
| Cost of equity | 6.9% - 8.8% | 7.85% |
| Tax rate | 19.1% - 21.0% | 20.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.0% - 5.6% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.69 | 0.72 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 8.8% |
| Tax rate | 19.1% | 21.0% |
| Debt/Equity ratio | 2.01 | 2.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.0% | 5.6% |
| Selected WACC | 5.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600027.SS | Huadian Power International Corp Ltd | 2.01 | 0.78 | 0.3 |
| 000539.SZ | Guangdong Electric Power Development Co Ltd | 4.56 | 0.91 | 0.2 |
| 000543.SZ | An Hui Wenergy Co Ltd | 2.33 | 0.6 | 0.21 |
| 579.HK | Beijing Jingneng Clean Energy Co Ltd | 2.95 | 0.67 | 0.2 |
| 600021.SS | Shanghai Electric Power Co Ltd | 4.66 | 1.05 | 0.22 |
| 600023.SS | Zhejiang Zheneng Electric Power Co Ltd | 0.71 | 0.88 | 0.56 |
| 600795.SS | Gd Power Development Co Ltd | 3.64 | 0.6 | 0.15 |
| 600886.SS | SDIC Power Holdings Co Ltd | 1.46 | 0.39 | 0.18 |
| 601985.SS | China National Nuclear Power Co Ltd | 2.02 | 0.58 | 0.22 |
| 601991.SS | Datang International Power Generation Co Ltd | 3.23 | 0.99 | 0.27 |
| Low | High | |
| Unlevered beta | 0.21 | 0.22 |
| Relevered beta | 0.54 | 0.58 |
| Adjusted relevered beta | 0.69 | 0.72 |
600027.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 600027.SS:
cost_of_equity (7.85%) = 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.