601633.SS WACC - Weighted Average Cost of Capital
The WACC of Great Wall Motor Co Ltd (601633.SS) is 8.5%.
| Range | Selected | |
| Cost of equity | 8.1% - 11.1% | 9.6% |
| Tax rate | 10.2% - 10.6% | 10.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.3% - 9.6% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.89 | 1.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 11.1% |
| Tax rate | 10.2% | 10.6% |
| Debt/Equity ratio | 0.29 | 0.29 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.3% | 9.6% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 601633.SS | Great Wall Motor Co Ltd | 0.29 | 1.1 | 0.87 |
| 000550.SZ | Jiangling Motors Corp Ltd | 0.13 | 1.37 | 1.23 |
| 000625.SZ | Chongqing Changan Automobile Co Ltd | 0.3 | 1.1 | 0.87 |
| 000800.SZ | FAW Jiefang Group Co Ltd | 0.45 | 0.79 | 0.57 |
| 002594.SZ | BYD Co Ltd | 0.16 | 0.94 | 0.82 |
| 489.HK | Dongfeng Motor Group Co Ltd | 3.21 | 1.19 | 0.31 |
| 600166.SS | Beiqi Foton Motor Co Ltd | 0.76 | 1.05 | 0.63 |
| 600418.SS | Anhui Jianghuai Automobile Group Corp Ltd | 0.26 | 0.6 | 0.49 |
| 600733.SS | BAIC BluePark New Energy Technology Co Ltd | 0.47 | 1.54 | 1.08 |
| 601238.SS | Guangzhou Automobile Group Co Ltd | 0.68 | 1.11 | 0.69 |
| Low | High | |
| Unlevered beta | 0.66 | 0.84 |
| Relevered beta | 0.84 | 1.06 |
| Adjusted relevered beta | 0.89 | 1.04 |
601633.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 601633.SS:
cost_of_equity (9.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.89) + 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.