601009.SS WACC - Weighted Average Cost of Capital
The WACC of Bank of Nanjing Co Ltd (601009.SS) is 4.8%.
| Range | Selected | |
| Cost of equity | 6.4% - 9.1% | 7.75% |
| Tax rate | 14.8% - 15.6% | 15.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.6% - 5.0% | 4.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.61 | 0.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 9.1% |
| Tax rate | 14.8% | 15.6% |
| Debt/Equity ratio | 4.9 | 4.9 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.6% | 5.0% |
| Selected WACC | 4.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 601009.SS | Bank of Nanjing Co Ltd | 4.9 | 0.33 | 0.06 |
| 002142.SZ | Bank of Ningbo Co Ltd | 3.49 | 1.32 | 0.33 |
| 1551.HK | Guangzhou Rural Commercial Bank Co Ltd | 9 | 0.22 | 0.02 |
| 1578.HK | Bank of Tianjin Co Ltd | 17.2 | 0.58 | 0.04 |
| 1963.HK | Bank of Chongqing Co Ltd | 2.27 | 0.85 | 0.29 |
| 3698.HK | Huishang Bank Corp Ltd | 9.82 | 0.58 | 0.06 |
| 416.HK | Bank of Jinzhou Co Ltd | 7.47 | 1.64 | 0.22 |
| 600919.SS | Bank of Jiangsu Co Ltd | 4.03 | 0.5 | 0.11 |
| 600926.SS | Bank of Hangzhou Co Ltd | 4.17 | 0.64 | 0.14 |
| 601077.SS | Chongqing Rural Commercial Bank Co Ltd | 4.94 | 0.48 | 0.09 |
| Low | High | |
| Unlevered beta | 0.08 | 0.12 |
| Relevered beta | 0.42 | 0.64 |
| Adjusted relevered beta | 0.61 | 0.76 |
601009.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 601009.SS:
cost_of_equity (7.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.61) + 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.