603790.SS WACC - Weighted Average Cost of Capital
The WACC of Argus Shanghai Textile Chemicals Co Ltd (603790.SS) is 9.7%.
| Range | Selected | |
| Cost of equity | 8.7% - 11.2% | 9.95% |
| Tax rate | 10.5% - 11.3% | 10.9% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.5% - 10.9% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.99 | 1.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 11.2% |
| Tax rate | 10.5% | 11.3% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.5% | 10.9% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603790.SS | Argus Shanghai Textile Chemicals Co Ltd | 0.05 | 0.87 | 0.83 |
| 002136.SZ | AnHui Annada Titanium Industry Co Ltd | 0.15 | 1.05 | 0.92 |
| 002809.SZ | Guangdong Redwall New Materials Co Ltd | 0.22 | 1.22 | 1.01 |
| 002909.SZ | Guangzhou Jointas Chemical Co Ltd | 0.3 | 1.21 | 0.95 |
| 300107.SZ | Hebei Jianxin Chemical Co Ltd | 0.02 | 1.5 | 1.47 |
| 300325.SZ | Jiangsu Dewei Advanced Materials Co Ltd | 8.14 | 0.62 | 0.08 |
| 300405.SZ | Liaoning Kelong Fine Chemical Inc | 0.43 | 1.5 | 1.09 |
| 300644.SZ | Nanjing Julong Science & Technology Co Ltd | 0.3 | 1.36 | 1.07 |
| 603683.SS | Shanghai Smith Adhesive New Material Co Ltd | 0.2 | 1.08 | 0.92 |
| 603798.SS | Qingdao Copton Technology Co Ltd | 0.02 | 1.1 | 1.07 |
| Low | High | |
| Unlevered beta | 0.94 | 1.04 |
| Relevered beta | 0.99 | 1.09 |
| Adjusted relevered beta | 0.99 | 1.06 |
603790.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 603790.SS:
cost_of_equity (9.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.99) + 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.