603156.SS
Hebei Yangyuan ZhiHui Beverage Co Ltd
Price:  
21.18 
CNY
Volume:  
2,971,564
China | Food Products

603156.SS WACC - Weighted Average Cost of Capital

The WACC of Hebei Yangyuan ZhiHui Beverage Co Ltd (603156.SS) is 9.5%.

The Cost of Equity of Hebei Yangyuan ZhiHui Beverage Co Ltd (603156.SS) is 9.75%.
The Cost of Debt of Hebei Yangyuan ZhiHui Beverage Co Ltd (603156.SS) is 5%.

RangeSelected
Cost of equity8.4% - 11.1%9.75%
Tax rate23.3% - 24.3%23.8%
Cost of debt5.0% - 5.0%5%
WACC8.2% - 10.7%9.5%
WACC

603156.SS WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta0.931.04
Additional risk adjustments0.0%0.5%
Cost of equity8.4%11.1%
Tax rate23.3%24.3%
Debt/Equity ratio
0.050.05
Cost of debt5.0%5.0%
After-tax WACC8.2%10.7%
Selected WACC9.5%

603156.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 603156.SS:

cost_of_equity (9.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.93) + 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.