601377.SS
China Industrial Securities Co Ltd
Price:  
6.33 
CNY
Volume:  
67,077,984
China | Capital Markets

601377.SS WACC - Weighted Average Cost of Capital

The WACC of China Industrial Securities Co Ltd (601377.SS) is 6.8%.

The Cost of Equity of China Industrial Securities Co Ltd (601377.SS) is 13.55%.
The Cost of Debt of China Industrial Securities Co Ltd (601377.SS) is 5%.

RangeSelected
Cost of equity11.8% - 15.3%13.55%
Tax rate14.9% - 20.5%17.7%
Cost of debt5.0% - 5.0%5%
WACC6.4% - 7.2%6.8%
WACC

601377.SS WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta1.51.62
Additional risk adjustments0.0%0.5%
Cost of equity11.8%15.3%
Tax rate14.9%20.5%
Debt/Equity ratio
2.492.49
Cost of debt5.0%5.0%
After-tax WACC6.4%7.2%
Selected WACC6.8%

601377.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 601377.SS:

cost_of_equity (13.55%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.5) + 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.