The WACC of Oriental Pearl Group Co Ltd (600637.SS) is 9.1%.
Range | Selected | |
Cost of equity | 7.7% - 11.4% | 9.55% |
Tax rate | 24.8% - 29.9% | 27.35% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.4% - 10.8% | 9.1% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.82 | 1.08 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.7% | 11.4% |
Tax rate | 24.8% | 29.9% |
Debt/Equity ratio | 0.09 | 0.09 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.4% | 10.8% |
Selected WACC | 9.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
600637.SS | Oriental Pearl Group Co Ltd | 0.09 | 1.08 | 1.01 |
000156.SZ | Wasu Media Holding Co Ltd | 0.16 | 1.27 | 1.13 |
000839.SZ | CITIC Guoan Information Industry Co Ltd | 0.28 | 1.38 | 1.14 |
600037.SS | Beijing Gehua CATV Network Co Ltd | 0.03 | 1.23 | 1.21 |
600831.SS | Shaanxi Broadcast & TV Network Intermediary Group Co Ltd | 2.23 | 1.21 | 0.46 |
600996.SS | Guizhou BC&TV Information Network Co Ltd | 0.8 | 1.33 | 0.84 |
601019.SS | Shandong Publishing & Media Co Ltd | 0.02 | 0.39 | 0.39 |
601098.SS | China South Publishing & Media Group Co Ltd | 0.09 | 0.25 | 0.23 |
601698.SS | China Satellite Communications Co Ltd | 0 | 1.54 | 1.54 |
601928.SS | Jiangsu Phoenix Publishing & Media Corp Ltd | 0.01 | 0.33 | 0.33 |
Low | High | |
Unlevered beta | 0.69 | 1.06 |
Relevered beta | 0.73 | 1.12 |
Adjusted relevered beta | 0.82 | 1.08 |
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 600637.SS:
cost_of_equity (9.55%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.82) + 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.