600781.SS
FUREN Group Pharmaceutical Co Ltd
Price:  
0.77 
CNY
Volume:  
13,339,900
China | Pharmaceuticals

600781.SS WACC - Weighted Average Cost of Capital

The WACC of FUREN Group Pharmaceutical Co Ltd (600781.SS) is 6.3%.

The Cost of Equity of FUREN Group Pharmaceutical Co Ltd (600781.SS) is 22.5%.
The Cost of Debt of FUREN Group Pharmaceutical Co Ltd (600781.SS) is 5%.

RangeSelected
Cost of equity12.7% - 32.3%22.5%
Tax rate4.9% - 11.4%8.15%
Cost of debt5.0% - 5.0%5%
WACC5.5% - 7.1%6.3%
WACC

600781.SS WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta1.644.02
Additional risk adjustments0.0%0.5%
Cost of equity12.7%32.3%
Tax rate4.9%11.4%
Debt/Equity ratio
9.439.43
Cost of debt5.0%5.0%
After-tax WACC5.5%7.1%
Selected WACC6.3%

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 (22.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.64) + 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.