600168.SS
Wuhan Sanzhen Industry Holding Co Ltd
Price:  
4.59 
CNY
Volume:  
8,554,733.00
China | Water Utilities
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600168.SS WACC - Weighted Average Cost of Capital

The WACC of Wuhan Sanzhen Industry Holding Co Ltd (600168.SS) is 5.8%.

The Cost of Equity of Wuhan Sanzhen Industry Holding Co Ltd (600168.SS) is 11.45%.
The Cost of Debt of Wuhan Sanzhen Industry Holding Co Ltd (600168.SS) is 5.00%.

Range Selected
Cost of equity 8.80% - 14.10% 11.45%
Tax rate 15.70% - 19.50% 17.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.2% - 6.3% 5.8%
WACC

600168.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1 1.46
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 14.10%
Tax rate 15.70% 19.50%
Debt/Equity ratio 3.45 3.45
Cost of debt 5.00% 5.00%
After-tax WACC 5.2% 6.3%
Selected WACC 5.8%

600168.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 600168.SS:

cost_of_equity (11.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1) + 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.