603519.SS WACC - Weighted Average Cost of Capital
The WACC of Jiangsu Liba Enterprise Joint-Stock Co Ltd (603519.SS) is 10.0%.
| Range | Selected | |
| Cost of equity | 8.9% - 11.6% | 10.25% |
| Tax rate | 13.0% - 13.9% | 13.45% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.7% - 11.3% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.01 | 1.12 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 11.6% |
| Tax rate | 13.0% | 13.9% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.7% | 11.3% |
| Selected WACC | 10.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603519.SS | Jiangsu Liba Enterprise Joint-Stock Co Ltd | 0.05 | 1.18 | 1.13 |
| 002136.SZ | AnHui Annada Titanium Industry Co Ltd | 0.18 | 0.99 | 0.86 |
| 002809.SZ | Guangdong Redwall New Materials Co Ltd | 0.3 | 1.21 | 0.97 |
| 002909.SZ | Guangzhou Jointas Chemical Co Ltd | 0.32 | 1.19 | 0.93 |
| 300067.SZ | Shanghai Anoky Group Co Ltd | 0.13 | 1.3 | 1.17 |
| 300107.SZ | Hebei Jianxin Chemical Co Ltd | 0.02 | 1.48 | 1.46 |
| 300243.SZ | Shandong Ruifeng Chemical Co Ltd | 0.27 | 1.21 | 0.98 |
| 300641.SZ | Jiangsu Zhengdan Chemical Industry Co Ltd | 0.01 | 1.38 | 1.37 |
| 600367.SS | Guizhou Redstar Developing Co Ltd | 0.01 | 1.13 | 1.12 |
| 603188.SS | Jiangsu Yabang Dyestuff Ltd | 0.16 | 0.83 | 0.73 |
| Low | High | |
| Unlevered beta | 0.98 | 1.13 |
| Relevered beta | 1.01 | 1.18 |
| Adjusted relevered beta | 1.01 | 1.12 |
603519.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 603519.SS:
cost_of_equity (10.25%) = 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.