600225.SS WACC - Weighted Average Cost of Capital
The WACC of Tianjin Songjiang Co Ltd (600225.SS) is 5.2%.
| Range | Selected | |
| Cost of equity | 5.8% - 8.2% | 7% |
| Tax rate | 3.7% - 6.0% | 4.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.0% - 5.4% | 5.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.52 | 0.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 8.2% |
| Tax rate | 3.7% | 6.0% |
| Debt/Equity ratio | 4.06 | 4.06 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.0% | 5.4% |
| Selected WACC | 5.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600225.SS | Tianjin Songjiang Co Ltd | 4.06 | 0.55 | 0.11 |
| 000573.SZ | DongGuan Winnerway Industrial Zone Co Ltd | 0.16 | 0.03 | 0.03 |
| 1232.HK | Golden Wheel Tiandi Holdings Company Ltd | 50.43 | 1.22 | 0.02 |
| 1321.HK | China New City Commercial Development Ltd | 2.82 | 0.28 | 0.08 |
| 1570.HK | Weiye Holdings Ltd | 2.36 | -0.03 | -0.01 |
| 1663.HK | Sino Harbour Holdings Group Ltd | 3.1 | 0.33 | 0.08 |
| 2699.HK | Xinming China Holdings Ltd | 41.05 | 0.21 | 0.01 |
| 600159.SS | Beijing Dalong Weiye Real Estate Development Co Ltd | 0.06 | 1.23 | 1.16 |
| 600692.SS | Shang Hai Ya Tong Co Ltd | 0.2 | 1.63 | 1.37 |
| 600791.SS | BEH-Property Co Ltd | 2.88 | 1.04 | 0.28 |
| Low | High | |
| Unlevered beta | 0.06 | 0.09 |
| Relevered beta | 0.28 | 0.46 |
| Adjusted relevered beta | 0.52 | 0.64 |
600225.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 600225.SS:
cost_of_equity (7.00%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.52) + 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.