The WACC of Zhe Jiang Dong Ri Ltd Co (600113.SS) is 6.6%.
Range | Selected | |
Cost of equity | 5.1% - 8.3% | 6.7% |
Tax rate | 25.1% - 26.0% | 25.55% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.1% - 8.2% | 6.6% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.4 | 0.65 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.1% | 8.3% |
Tax rate | 25.1% | 26.0% |
Debt/Equity ratio | 0.03 | 0.03 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.1% | 8.2% |
Selected WACC | 6.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
600113.SS | Zhe Jiang Dong Ri Ltd Co | 0.03 | 0.89 | 0.87 |
002336.SZ | Renrenle Commercial Group Co Ltd | 5.14 | 1 | 0.21 |
002697.SZ | Chengdu Hongqi Chain Co Ltd | 0.12 | 1.07 | 0.99 |
1210.HK | Christine International Holdings Ltd | 3.93 | 0.25 | 0.06 |
2683.T | Uoki Co Ltd | 0.23 | 0.09 | 0.08 |
601116.SS | Sanjiang Shopping Club Co Ltd | 0.05 | 1.2 | 1.16 |
602.HK | Jiahua Stores Holdings Ltd | 14.09 | 1.29 | 0.11 |
605188.SS | Jiangxi Guoguang Commercial Chains Co Ltd | 0.12 | 1.41 | 1.3 |
7515.T | Maruyoshi Center Inc | 2.02 | 0.2 | 0.08 |
974.HK | China Shun Ke Long Holdings Ltd | 0.58 | 0.06 | 0.04 |
Low | High | |
Unlevered beta | 0.1 | 0.47 |
Relevered beta | 0.1 | 0.48 |
Adjusted relevered beta | 0.4 | 0.65 |
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 600113.SS:
cost_of_equity (6.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.4) + 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.