601200.SS WACC - Weighted Average Cost of Capital
The WACC of Shanghai Environment Group Co Ltd (601200.SS) is 6.9%.
| Range | Selected | |
| Cost of equity | 7.9% - 11.0% | 9.45% |
| Tax rate | 14.3% - 15.8% | 15.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 7.7% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.85 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 11.0% |
| Tax rate | 14.3% | 15.8% |
| Debt/Equity ratio | 0.93 | 0.93 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 7.7% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 601200.SS | Shanghai Environment Group Co Ltd | 0.93 | 0.69 | 0.39 |
| 002672.SZ | Dongjiang Environmental Co Ltd | 1.17 | 1.27 | 0.63 |
| 002973.SZ | QiaoYin City Management Co Ltd | 0.67 | 1.22 | 0.78 |
| 003027.SZ | Tongxing Environmental Protection Technology Co Ltd | 0.26 | 0.99 | 0.81 |
| 1253.HK | China Greenland Broad Greenstate Group Co Ltd | 7.97 | 1.03 | 0.13 |
| 300355.SZ | Inner Mongolia M-Grass Ecology and Environment Group Co Ltd | 0.92 | 0.99 | 0.55 |
| 3718.HK | Beijing Enterprises Urban Resources Group Ltd | 2.24 | 0.25 | 0.09 |
| 601330.SS | Dynagreen Environmental Protection Group Co Ltd | 1.16 | 0.89 | 0.45 |
| 601827.SS | Chongqing Sanfeng Environment Group Corp Ltd | 0.52 | 0.59 | 0.41 |
| 603568.SS | Zhejiang Weiming Environment Protection Co Ltd | 0.22 | 0.91 | 0.77 |
| Low | High | |
| Unlevered beta | 0.43 | 0.58 |
| Relevered beta | 0.78 | 1.04 |
| Adjusted relevered beta | 0.85 | 1.03 |
601200.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 601200.SS:
cost_of_equity (9.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.85) + 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.