603939.SS
Yifeng Pharmacy Chain Co Ltd
Price:  
26.92 
CNY
Volume:  
3,107,141
China | Food & Staples Retailing

603939.SS WACC - Weighted Average Cost of Capital

The WACC of Yifeng Pharmacy Chain Co Ltd (603939.SS) is 8.2%.

The Cost of Equity of Yifeng Pharmacy Chain Co Ltd (603939.SS) is 9.9%.
The Cost of Debt of Yifeng Pharmacy Chain Co Ltd (603939.SS) is 5%.

RangeSelected
Cost of equity8.7% - 11.1%9.9%
Tax rate24.2% - 24.8%24.5%
Cost of debt5.0% - 5.0%5%
WACC7.3% - 9.0%8.2%
WACC

603939.SS WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium6.1%7.1%
Adjusted beta0.981.04
Additional risk adjustments0.0%0.5%
Cost of equity8.7%11.1%
Tax rate24.2%24.8%
Debt/Equity ratio
0.390.39
Cost of debt5.0%5.0%
After-tax WACC7.3%9.0%
Selected WACC8.2%

603939.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 603939.SS:

cost_of_equity (9.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.98) + 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.