600781.SS
FUREN Group Pharmaceutical Co Ltd
Price:  
0.77 
CNY
Volume:  
13,339,900.00
China | Pharmaceuticals
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600781.SS WACC - Weighted Average Cost of Capital

The WACC of FUREN Group Pharmaceutical Co Ltd (600781.SS) is 6.5%.

The Cost of Equity of FUREN Group Pharmaceutical Co Ltd (600781.SS) is 24.00%.
The Cost of Debt of FUREN Group Pharmaceutical Co Ltd (600781.SS) is 5.00%.

Range Selected
Cost of equity 14.50% - 33.50% 24.00%
Tax rate 4.90% - 11.40% 8.15%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.7% - 7.2% 6.5%
WACC

600781.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.93 4.19
Additional risk adjustments 0.0% 0.5%
Cost of equity 14.50% 33.50%
Tax rate 4.90% 11.40%
Debt/Equity ratio 9.43 9.43
Cost of debt 5.00% 5.00%
After-tax WACC 5.7% 7.2%
Selected WACC 6.5%

600781.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 600781.SS:

cost_of_equity (24.00%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.93) + 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.