The WACC of Shanghai Jiaoda Onlly Co Ltd (600530.SS) is 7.3%.
Range | Selected | |
Cost of equity | 6.5% - 8.3% | 7.4% |
Tax rate | 5.2% - 5.9% | 5.55% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.4% - 8.2% | 7.3% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.62 | 0.65 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.5% | 8.3% |
Tax rate | 5.2% | 5.9% |
Debt/Equity ratio | 0.03 | 0.03 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.4% | 8.2% |
Selected WACC | 7.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
600530.SS | Shanghai Jiaoda Onlly Co Ltd | 0.03 | 0.48 | 0.47 |
052260.KQ | Hyundai BioLand Co Ltd | 0.23 | 0.53 | 0.44 |
092730.KQ | NeoPharm Co Ltd | 0 | 0.39 | 0.39 |
1338.HK | BaWang International Group Holding Ltd | 0.11 | 0.53 | 0.48 |
175250.KQ | Icure Pharmaceutical Inc | 0.6 | 0.64 | 0.41 |
600439.SS | Henan Rebecca Hair Products Co Ltd | 0.54 | 0.7 | 0.46 |
603059.SS | Perfect Group Corp Ltd | 0.25 | 0.99 | 0.8 |
6666.TW | Luo Lih Fen Holding Co Ltd | 0.03 | 0.87 | 0.84 |
6896.HK | Golden Throat Holdings Group Co Ltd | 0.14 | 0.17 | 0.15 |
8281.HK | China Golden Classic Group Ltd | 0.23 | 0.22 | 0.18 |
Low | High | |
Unlevered beta | 0.43 | 0.46 |
Relevered beta | 0.43 | 0.48 |
Adjusted relevered beta | 0.62 | 0.65 |
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 600530.SS:
cost_of_equity (7.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.62) + 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.