600037.SS WACC - Weighted Average Cost of Capital
The WACC of Beijing Gehua CATV Network Co Ltd (600037.SS) is 10.4%.
| Range | Selected | |
| Cost of equity | 9.3% - 11.9% | 10.6% |
| Tax rate | 1.7% - 2.1% | 1.9% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.1% - 11.7% | 10.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.08 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 11.9% |
| Tax rate | 1.7% | 2.1% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.1% | 11.7% |
| Selected WACC | 10.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600037.SS | Beijing Gehua CATV Network Co Ltd | 0.04 | 1.21 | 1.17 |
| 000156.SZ | Wasu Media Holding Co Ltd | 0.18 | 1.27 | 1.09 |
| 000839.SZ | CITIC Guoan Information Industry Co Ltd | 0.29 | 1.33 | 1.04 |
| 002238.SZ | Shenzhen Topway Video Communication Co Ltd | 0.08 | 1.36 | 1.25 |
| 600831.SS | Shaanxi Broadcast & TV Network Intermediary Group Co Ltd | 2.94 | 1.26 | 0.32 |
| 600996.SS | Guizhou BC&TV Information Network Co Ltd | 0.76 | 1.31 | 0.75 |
| 601698.SS | China Satellite Communications Co Ltd | 0 | 1.6 | 1.59 |
| 601858.SS | China Science Publishing & Media Ltd | 0.01 | 1.51 | 1.5 |
| 601929.SS | JiShi Media Co Ltd | 0.84 | 1.96 | 1.08 |
| 603888.SS | Xinhuanet Co Ltd | 0 | 1.23 | 1.22 |
| Low | High | |
| Unlevered beta | 1.08 | 1.19 |
| Relevered beta | 1.12 | 1.24 |
| Adjusted relevered beta | 1.08 | 1.16 |
600037.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 600037.SS:
cost_of_equity (10.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.08) + 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.