603319.SS
Hunan Oil Pump Co Ltd
Price:  
33.23 
CNY
Volume:  
9,388,960
China | Machinery

603319.SS WACC - Weighted Average Cost of Capital

The WACC of Hunan Oil Pump Co Ltd (603319.SS) is 10.7%.

The Cost of Equity of Hunan Oil Pump Co Ltd (603319.SS) is 11.55%.
The Cost of Debt of Hunan Oil Pump Co Ltd (603319.SS) is 5%.

RangeSelected
Cost of equity10.0% - 13.1%11.55%
Tax rate9.3% - 10.4%9.85%
Cost of debt5.0% - 5.0%5%
WACC9.3% - 12.0%10.7%
WACC

603319.SS WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta1.191.32
Additional risk adjustments0.0%0.5%
Cost of equity10.0%13.1%
Tax rate9.3%10.4%
Debt/Equity ratio
0.140.14
Cost of debt5.0%5.0%
After-tax WACC9.3%12.0%
Selected WACC10.7%

603319.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 603319.SS:

cost_of_equity (11.55%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.19) + 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.