The WACC of Beijing AriTime Intelligent Control Co Ltd (600560.SS) is 9.5%.
Range | Selected | |
Cost of equity | 8.1% - 11.1% | 9.6% |
Tax rate | 4.6% - 5.4% | 5% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.0% - 10.9% | 9.5% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.89 | 1.04 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.1% | 11.1% |
Tax rate | 4.6% | 5.4% |
Debt/Equity ratio | 0.03 | 0.03 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.0% | 10.9% |
Selected WACC | 9.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
600560.SS | Beijing AriTime Intelligent Control Co Ltd | 0.03 | 1.06 | 1.03 |
000806.SZ | Galaxy Biomedical Investment Co Ltd | 0.86 | -0.12 | -0.07 |
002606.SZ | Dalian Insulator Group Co Ltd | 0.15 | 0.77 | 0.67 |
002806.SZ | Guangdong Huafeng New Energy Technology Co Ltd | 0.27 | 1.4 | 1.11 |
002896.SZ | Ningbo ZhongDa Leader Intelligent Transmission Co Ltd | 0.01 | 1.61 | 1.59 |
002927.SZ | Guizhou Taiyong Changzheng Technology Co Ltd | 0.04 | 0.93 | 0.9 |
300141.SZ | Suzhou Industrial Park Heshun Electric Co Ltd | 0.11 | 1.14 | 1.03 |
300650.SZ | Tecnon Fujian Commercial Lighting Co Ltd | 0.12 | 1.49 | 1.34 |
600379.SS | Shaanxi Baoguang Vacuum Electronic Apparatus Co Ltd | 0.13 | 0.76 | 0.68 |
603133.SS | Tanyuan Technology Co Ltd | 2 | 1.07 | 0.37 |
Low | High | |
Unlevered beta | 0.81 | 1.03 |
Relevered beta | 0.84 | 1.06 |
Adjusted relevered beta | 0.89 | 1.04 |
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 600560.SS:
cost_of_equity (9.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.89) + 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.