600496.SS WACC - Weighted Average Cost of Capital
The WACC of Changjiang & Jinggong Steel Building Group Co Ltd (600496.SS) is 6.4%.
| Range | Selected | |
| Cost of equity | 6.2% - 10.6% | 8.4% |
| Tax rate | 3.8% - 4.2% | 4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 7.4% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.58 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 10.6% |
| Tax rate | 3.8% | 4.2% |
| Debt/Equity ratio | 1.26 | 1.26 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 7.4% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600496.SS | Changjiang & Jinggong Steel Building Group Co Ltd | 1.26 | 1.06 | 0.48 |
| 000928.SZ | Sinosteel Engineering & Technology Co Ltd | 0.56 | 1.01 | 0.66 |
| 002135.SZ | Zhejiang Southeast Space Frame Co Ltd | 1.45 | 1.36 | 0.57 |
| 002307.SZ | Xinjiang Beixin Road & Bridge Group Co Ltd | 7.55 | 1.21 | 0.15 |
| 002310.SZ | Beijing Orient Landscape & Environment Co Ltd | 1.68 | 0.27 | 0.11 |
| 002564.SZ | SuZhou THVOW Technology Co Ltd | 0.84 | 0.73 | 0.4 |
| 1156.HK | China New Energy Ltd | 0.58 | 0.2 | 0.13 |
| 1799.HK | Xinte Energy Co Ltd | 5.23 | 1.13 | 0.19 |
| 600072.SS | CSSC Science & Technology Co Ltd | 1.26 | 1.11 | 0.51 |
| 600248.SS | Shaanxi Construction Engineering Group Corp Ltd | 4.96 | 0.82 | 0.14 |
| Low | High | |
| Unlevered beta | 0.17 | 0.43 |
| Relevered beta | 0.37 | 0.96 |
| Adjusted relevered beta | 0.58 | 0.97 |
600496.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 600496.SS:
cost_of_equity (8.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.58) + 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.