605338.SS WACC - Weighted Average Cost of Capital
The WACC of Zhongyin Babi Food Co Ltd (605338.SS) is 10.0%.
| Range | Selected | |
| Cost of equity | 8.9% - 11.3% | 10.1% |
| Tax rate | 23.9% - 24.4% | 24.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.8% - 11.2% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.01 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 11.3% |
| Tax rate | 23.9% | 24.4% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.8% | 11.2% |
| Selected WACC | 10.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 605338.SS | Zhongyin Babi Food Co Ltd | 0.01 | 1.18 | 1.17 |
| 002650.SZ | Jiajia Food Group Co Ltd | 0.02 | 0.91 | 0.9 |
| 002695.SZ | Jiangxi Huangshanghuang Group Food Co Ltd | 0.01 | 1.38 | 1.37 |
| 002891.SZ | Yantai China Pet Foods Co Ltd | 0.06 | 1.03 | 0.99 |
| 002991.SZ | Gan Yuan Foods Co Ltd | 0.01 | 1.03 | 1.02 |
| 003000.SZ | Huawen Food Co Ltd | 0.05 | 1.35 | 1.3 |
| 300673.SZ | Petpal Pet Nutrition Technology Co Ltd | 0.19 | 1.19 | 1.04 |
| 603697.SS | YouYou Foods Co Ltd | 0.02 | 0.73 | 0.72 |
| 603755.SS | Qingdao Richen Food Co Ltd | 0.05 | 0.89 | 0.86 |
| 605337.SS | Zhe Jiang Li Zi Yuan Food Co Ltd | 0.13 | 1.38 | 1.25 |
| Low | High | |
| Unlevered beta | 1.01 | 1.09 |
| Relevered beta | 1.01 | 1.1 |
| Adjusted relevered beta | 1.01 | 1.07 |
605338.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 605338.SS:
cost_of_equity (10.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.01) + 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.