603668.SS
Fujian Tianma Science and Technology Group Co Ltd
Price:  
13.18 
CNY
Volume:  
7,805,780
China | Food Products

603668.SS WACC - Weighted Average Cost of Capital

The WACC of Fujian Tianma Science and Technology Group Co Ltd (603668.SS) is 8.6%.

The Cost of Equity of Fujian Tianma Science and Technology Group Co Ltd (603668.SS) is 11.55%.
The Cost of Debt of Fujian Tianma Science and Technology Group Co Ltd (603668.SS) is 5%.

RangeSelected
Cost of equity9.4% - 13.7%11.55%
Tax rate12.3% - 14.0%13.15%
Cost of debt5.0% - 5.0%5%
WACC7.3% - 9.8%8.6%
WACC

603668.SS WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta1.091.41
Additional risk adjustments0.0%0.5%
Cost of equity9.4%13.7%
Tax rate12.3%14.0%
Debt/Equity ratio
0.70.7
Cost of debt5.0%5.0%
After-tax WACC7.3%9.8%
Selected WACC8.6%

603668.SS WACC - Detailed calculations of Beta

LowHigh
Unlevered beta0.711
Relevered beta1.131.61
Adjusted relevered beta1.091.41

603668.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 603668.SS:

cost_of_equity (11.55%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.09) + 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.