600448.SS
Huafang Co Ltd
Price:  
3.53 
CNY
Volume:  
44,679,260.00
China | Textiles, Apparel & Luxury Goods
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600448.SS WACC - Weighted Average Cost of Capital

The WACC of Huafang Co Ltd (600448.SS) is 8.6%.

The Cost of Equity of Huafang Co Ltd (600448.SS) is 11.55%.
The Cost of Debt of Huafang Co Ltd (600448.SS) is 5.00%.

Range Selected
Cost of equity 10.00% - 13.10% 11.55%
Tax rate 1.30% - 5.10% 3.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.8% - 9.5% 8.6%
WACC

600448.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 1.32
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.00% 13.10%
Tax rate 1.30% 5.10%
Debt/Equity ratio 0.77 0.77
Cost of debt 5.00% 5.00%
After-tax WACC 7.8% 9.5%
Selected WACC 8.6%

600448.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 600448.SS:

cost_of_equity (11.55%) = 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.