600282.SS WACC - Weighted Average Cost of Capital
The WACC of Nanjing Iron & Steel Co Ltd (600282.SS) is 6.7%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.5% | 9.15% |
| Tax rate | 15.2% - 16.2% | 15.7% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 7.3% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.83 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.5% |
| Tax rate | 15.2% | 16.2% |
| Debt/Equity ratio | 1.01 | 1.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 7.3% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600282.SS | Nanjing Iron & Steel Co Ltd | 1.01 | 0.76 | 0.41 |
| 000761.SZ | Bengang Steel Plates Co Ltd | 1.63 | 1.74 | 0.73 |
| 000778.SZ | Xinxing Ductile Iron Pipes Co Ltd | 1.2 | 1.02 | 0.51 |
| 002110.SZ | Sansteel Minguang Co Ltd Fujian | 2.72 | 1.52 | 0.46 |
| 1090.HK | Da Ming International Holdings Ltd | 9.64 | 0.33 | 0.04 |
| 600307.SS | Gansu Jiu Steel Group Hongxing Iron & Steel Co Ltd | 3.52 | 0.9 | 0.22 |
| 600782.SS | Xinyu Iron & Steel Co Ltd | 1.26 | 1.49 | 0.72 |
| 600985.SS | Huaibei Mining Holdings Co Ltd | 0.31 | 1.19 | 0.94 |
| 601003.SS | Liuzhou Iron & Steel Co Ltd | 3.93 | 1.11 | 0.26 |
| 601686.SS | Tianjin You Fa Steel Pipe Group Stock Co Ltd | 1.02 | 0.75 | 0.4 |
| Low | High | |
| Unlevered beta | 0.4 | 0.48 |
| Relevered beta | 0.75 | 0.94 |
| Adjusted relevered beta | 0.83 | 0.96 |
600282.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 600282.SS:
cost_of_equity (9.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.83) + 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.