600235.SS
Minfeng Special Paper Co Ltd
Price:  
5.72 
CNY
Volume:  
5,530,600.00
China | Paper & Forest Products
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600235.SS WACC - Weighted Average Cost of Capital

The WACC of Minfeng Special Paper Co Ltd (600235.SS) is 9.1%.

The Cost of Equity of Minfeng Special Paper Co Ltd (600235.SS) is 11.65%.
The Cost of Debt of Minfeng Special Paper Co Ltd (600235.SS) is 5.00%.

Range Selected
Cost of equity 10.00% - 13.30% 11.65%
Tax rate 1.60% - 2.80% 2.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.0% - 10.1% 9.1%
WACC

600235.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.19 1.35
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.00% 13.30%
Tax rate 1.60% 2.80%
Debt/Equity ratio 0.61 0.61
Cost of debt 5.00% 5.00%
After-tax WACC 8.0% 10.1%
Selected WACC 9.1%

600235.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 600235.SS:

cost_of_equity (11.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.19) + 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.