603885.SS
JUNEYAO AIRLINES Co Ltd
Price:  
12.40 
CNY
Volume:  
16,784,044.00
China | Airlines
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603885.SS WACC - Weighted Average Cost of Capital

The WACC of JUNEYAO AIRLINES Co Ltd (603885.SS) is 6.5%.

The Cost of Equity of JUNEYAO AIRLINES Co Ltd (603885.SS) is 9.85%.
The Cost of Debt of JUNEYAO AIRLINES Co Ltd (603885.SS) is 5.00%.

Range Selected
Cost of equity 7.80% - 11.90% 9.85%
Tax rate 23.90% - 24.20% 24.05%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.6% - 7.5% 6.5%
WACC

603885.SS WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.84 1.16
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.80% 11.90%
Tax rate 23.90% 24.20%
Debt/Equity ratio 1.21 1.21
Cost of debt 5.00% 5.00%
After-tax WACC 5.6% 7.5%
Selected WACC 6.5%

603885.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 603885.SS:

cost_of_equity (9.85%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.84) + 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.