600070.SS WACC - Weighted Average Cost of Capital
The WACC of Zhejiang Furun Digital Technology Co Ltd (600070.SS) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.5% - 11.7% | 9.1% |
| Tax rate | 7.8% - 13.8% | 10.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 9.3% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.63 | 1.13 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 11.7% |
| Tax rate | 7.8% | 13.8% |
| Debt/Equity ratio | 0.49 | 0.49 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 9.3% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600070.SS | Zhejiang Furun Digital Technology Co Ltd | 0.49 | 0.23 | 0.16 |
| 000850.SZ | Anhui Huamao Textile Co Ltd | 0.47 | 1.12 | 0.78 |
| 002427.SZ | Zhejiang Unifull Industrial Fibre Co Ltd | 0.11 | 1.24 | 1.13 |
| 2111.HK | Best Pacific International Holdings Ltd | 0.78 | 0.57 | 0.33 |
| 3778.HK | China Weaving Materials Holdings Ltd | 1.1 | 0.39 | 0.2 |
| 528.HK | Kingdom Holdings Ltd | 1.42 | 0.01 | 0.01 |
| 600220.SS | Jiangsu Sunshine Co Ltd | 2.34 | 0.82 | 0.26 |
| 600448.SS | Huafang Co Ltd | 0.52 | 1.32 | 0.9 |
| 601599.SS | Zhewen Pictures Group Co Ltd | 0.2 | 1.19 | 1 |
| 603365.SS | Shanghai Shuixing Home Textile Co Ltd | 0.03 | 1.1 | 1.07 |
| Low | High | |
| Unlevered beta | 0.31 | 0.83 |
| Relevered beta | 0.45 | 1.19 |
| Adjusted relevered beta | 0.63 | 1.13 |
600070.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 600070.SS:
cost_of_equity (9.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.63) + 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.