688196.SS WACC - Weighted Average Cost of Capital
The WACC of Longyan Zhuoyue New Energy Co Ltd (688196.SS) is 7.1%.
| Range | Selected | |
| Cost of equity | 5.6% - 9.2% | 7.4% |
| Tax rate | 2.2% - 2.5% | 2.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.5% - 8.7% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.48 | 0.77 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 9.2% |
| Tax rate | 2.2% | 2.5% |
| Debt/Equity ratio | 0.13 | 0.13 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.5% | 8.7% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688196.SS | Longyan Zhuoyue New Energy Co Ltd | 0.13 | 1.11 | 0.99 |
| 000096.SZ | Shenzhen Guangju Energy Co Ltd | 0 | 0.62 | 0.62 |
| 000159.SZ | Xinjiang International Industry Co Ltd | 0.4 | 1.17 | 0.84 |
| 002960.KS | Hankook Shell Oil Co Ltd | 0 | 0.28 | 0.28 |
| 060900.KQ | Daehan Green Power Corp | 0.23 | 0.08 | 0.07 |
| 2030.SR | Saudi Arabian Refineries Company SJSC | 0 | 0.94 | 0.94 |
| 8479.HK | JTF International Holdings Ltd | 0.01 | -0.27 | -0.27 |
| AI.BK | Asian Insulators PCL | 0 | 0.56 | 0.56 |
| ETWA.JK | Eterindo Wahanatama Tbk PT | 2.71 | -1.36 | -0.37 |
| JNOS.ME | Slavneft' Yaroslavnefteorgsintez PAO | 0.8 | 0.02 | 0.01 |
| Low | High | |
| Unlevered beta | 0.19 | 0.58 |
| Relevered beta | 0.22 | 0.66 |
| Adjusted relevered beta | 0.48 | 0.77 |
688196.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 688196.SS:
cost_of_equity (7.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.48) + 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.