603225.SS
Xinfengming Group Co Ltd
Price:  
12.28 
CNY
Volume:  
12,123,049.00
China | Chemicals
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603225.SS WACC - Weighted Average Cost of Capital

The WACC of Xinfengming Group Co Ltd (603225.SS) is 6.7%.

The Cost of Equity of Xinfengming Group Co Ltd (603225.SS) is 10.05%.
The Cost of Debt of Xinfengming Group Co Ltd (603225.SS) is 5.00%.

Range Selected
Cost of equity 8.30% - 11.80% 10.05%
Tax rate 10.50% - 13.70% 12.10%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.0% - 7.3% 6.7%
WACC

603225.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.93 1.14
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 11.80%
Tax rate 10.50% 13.70%
Debt/Equity ratio 1.49 1.49
Cost of debt 5.00% 5.00%
After-tax WACC 6.0% 7.3%
Selected WACC 6.7%

603225.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 603225.SS:

cost_of_equity (10.05%) = 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.