The WACC of Wuxi Commercial Mansion Grand Orient Co Ltd (600327.SS) is 6.9%.
Range | Selected | |
Cost of equity | 6.3% - 9.1% | 7.7% |
Tax rate | 24.0% - 26.0% | 25% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.8% - 8.0% | 6.9% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.59 | 0.77 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.3% | 9.1% |
Tax rate | 24.0% | 26.0% |
Debt/Equity ratio | 0.27 | 0.27 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.8% | 8.0% |
Selected WACC | 6.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
600327.SS | Wuxi Commercial Mansion Grand Orient Co Ltd | 0.27 | 0.5 | 0.42 |
000753.SZ | Fujian Zhangzhou Development Co Ltd | 0.8 | 1.18 | 0.74 |
000996.SZ | China CIFCO Investment Co Ltd | 0.14 | 1.73 | 1.57 |
1771.HK | Sunfonda Group Holdings Ltd | 13.6 | 0.51 | 0.05 |
1959.HK | Centenary United Holdings Ltd | 1.53 | -0.41 | -0.19 |
2337.HK | United Strength Power Holdings Ltd | 1.2 | 0.43 | 0.22 |
3836.HK | China Harmony Auto Holding Ltd | 5.08 | 1.53 | 0.32 |
600386.SS | Beijing Bashi Media Co Ltd | 0.55 | 1.5 | 1.06 |
601258.SS | Pang Da Automobile Trade Co Ltd | 1.79 | 0.77 | 0.33 |
603353.SS | Hunan Heshun Petroleum Co Ltd | 0.04 | 1.25 | 1.22 |
Low | High | |
Unlevered beta | 0.32 | 0.54 |
Relevered beta | 0.39 | 0.66 |
Adjusted relevered beta | 0.59 | 0.77 |
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 600327.SS:
cost_of_equity (7.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.59) + 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.