600310.SS WACC - Weighted Average Cost of Capital
The WACC of Guangxi Guidong Electric Power Co Ltd (600310.SS) is 5.6%.
| Range | Selected | |
| Cost of equity | 9.3% - 11.8% | 10.55% |
| Tax rate | 26.2% - 35.3% | 30.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 5.8% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.09 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 11.8% |
| Tax rate | 26.2% | 35.3% |
| Debt/Equity ratio | 2.38 | 2.38 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 5.8% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600310.SS | Guangxi Guidong Electric Power Co Ltd | 2.38 | 1.16 | 0.42 |
| 001896.SZ | Henan Yuneng Holdings Co Ltd | 3.28 | 1.25 | 0.37 |
| 002608.SZ | Jiangsu Guoxin Corp Ltd | 1.58 | 1.02 | 0.47 |
| 1713.HK | Sichuan Energy Investment Development Co Ltd | 0.26 | 0.2 | 0.17 |
| 600396.SS | Shenyang Jinshan Energy Co Ltd | 2.26 | 1.06 | 0.4 |
| 600452.SS | Chongqing Fuling Electric Power Industrial Co Ltd | 0 | 1.02 | 1.02 |
| 600509.SS | Xinjiang Tianfu Energy Co Ltd | 1.72 | 0.96 | 0.42 |
| 600644.SS | Leshan Electric Power Co Ltd | 0.12 | 0.89 | 0.81 |
| 600969.SS | Hunan Chendian International Development Co Ltd | 2.77 | 0.99 | 0.33 |
| 600995.SS | Yunnan Wenshan Electric Power Co Ltd | 0.69 | 1.07 | 0.71 |
| Low | High | |
| Unlevered beta | 0.41 | 0.44 |
| Relevered beta | 1.13 | 1.22 |
| Adjusted relevered beta | 1.09 | 1.15 |
600310.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 600310.SS:
cost_of_equity (10.55%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.09) + 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.