603077.SS
Sichuan Hebang Biotechnology Co Ltd
Price:  
1.75 
CNY
Volume:  
57,371,610.00
China | Chemicals
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603077.SS WACC - Weighted Average Cost of Capital

The WACC of Sichuan Hebang Biotechnology Co Ltd (603077.SS) is 8.1%.

The Cost of Equity of Sichuan Hebang Biotechnology Co Ltd (603077.SS) is 10.35%.
The Cost of Debt of Sichuan Hebang Biotechnology Co Ltd (603077.SS) is 5.00%.

Range Selected
Cost of equity 8.90% - 11.80% 10.35%
Tax rate 15.20% - 16.00% 15.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 9.1% 8.1%
WACC

603077.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 1.01 1.14
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.90% 11.80%
Tax rate 15.20% 16.00%
Debt/Equity ratio 0.56 0.56
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 9.1%
Selected WACC 8.1%

603077.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 603077.SS:

cost_of_equity (10.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.01) + 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.