603866.SS WACC - Weighted Average Cost of Capital
The WACC of Toly Bread Co Ltd (603866.SS) is 10.5%.
| Range | Selected | |
| Cost of equity | 9.7% - 13.2% | 11.45% |
| Tax rate | 22.4% - 22.5% | 22.45% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.0% - 12.1% | 10.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.14 | 1.34 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.7% | 13.2% |
| Tax rate | 22.4% | 22.5% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.0% | 12.1% |
| Selected WACC | 10.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603866.SS | Toly Bread Co Ltd | 0.14 | 1.47 | 1.33 |
| 002216.SZ | Sanquan Food Co Ltd | 0.08 | 1.5 | 1.41 |
| 002507.SZ | Chongqing Fuling Zhacai Group Co Ltd | 0 | 1.19 | 1.19 |
| 002557.SZ | Chacha Food Co Ltd | 0.22 | 1.09 | 0.94 |
| 1458.HK | Zhou Hei Ya International Holdings Company Ltd | 0.07 | 1 | 0.95 |
| 600298.SS | Angel Yeast Co Ltd | 0.21 | 0.49 | 0.42 |
| 600872.SS | Jonjee Hi-tech Industrial and Commercial Holding Co Ltd | 0.05 | 1.57 | 1.52 |
| 603156.SS | Hebei Yangyuan ZhiHui Beverage Co Ltd | 0.04 | 0.92 | 0.89 |
| 603317.SS | Sichuan Teway Food Group Co Ltd | 0 | 1.56 | 1.56 |
| 603345.SS | Fujian Anjoy Foods Co Ltd | 0.02 | 1.59 | 1.57 |
| Low | High | |
| Unlevered beta | 1.1 | 1.36 |
| Relevered beta | 1.21 | 1.51 |
| Adjusted relevered beta | 1.14 | 1.34 |
603866.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 603866.SS:
cost_of_equity (11.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.14) + 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.