The WACC of Xinjiang Talimu Agriculture Development Co Ltd (600359.SS) is 8.4%.
Range | Selected | |
Cost of equity | 7.6% - 10.3% | 8.95% |
Tax rate | 2.4% - 2.6% | 2.5% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.3% - 9.6% | 8.4% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.81 | 0.93 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.6% | 10.3% |
Tax rate | 2.4% | 2.6% |
Debt/Equity ratio | 0.14 | 0.14 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.3% | 9.6% |
Selected WACC | 8.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
600359.SS | Xinjiang Talimu Agriculture Development Co Ltd | 0.14 | 0.81 | 0.71 |
1431.HK | YuanShengTai Dairy Farm Ltd | 0.77 | 0.68 | 0.39 |
1492.HK | China Zhongdi Dairy Holdings Co Ltd | 1.08 | 0.05 | 0.02 |
300175.SZ | Lontrue Co Ltd | 0.01 | 1.25 | 1.25 |
300189.SZ | Hainan Shennong Technology Co Ltd | 0.05 | 1.22 | 1.16 |
300511.SZ | Shanghai Xuerong Biotechnology Co Ltd | 0.59 | 1.6 | 1.01 |
600108.SS | Gansu Yasheng Industrial Group Co Ltd | 0.71 | 0.86 | 0.51 |
600354.SS | Gansu Dunhuang Seed Group Co Ltd | 0.09 | 0.99 | 0.91 |
600506.SS | Xinjiang Korla Pear Co Ltd | 0.25 | 0.86 | 0.69 |
600540.SS | Xinjiang Sayram Modern Agriculture Co Ltd | 1.2 | 0.65 | 0.3 |
Low | High | |
Unlevered beta | 0.62 | 0.79 |
Relevered beta | 0.72 | 0.9 |
Adjusted relevered beta | 0.81 | 0.93 |
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 600359.SS:
cost_of_equity (8.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.81) + 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.