BZUN WACC - Weighted Average Cost of Capital
The WACC of Baozun Inc (BZUN) is 5.3%.
| Range | Selected | |
| Cost of equity | 5.6% - 9.5% | 7.55% |
| Tax rate | 14.5% - 21.6% | 18.05% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 4.4% - 6.2% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.38 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 9.5% |
| Tax rate | 14.5% | 21.6% |
| Debt/Equity ratio | 1.19 | 1.19 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 4.4% | 6.2% |
| Selected WACC | 5.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BZUN | Baozun Inc | 1.19 | 0.89 | 0.46 |
| FTFT | Future Fintech Group Inc | 0.24 | 0.77 | 0.65 |
| MARK | Remark Holdings Inc | 4.22 | -0.1 | -0.02 |
| PBX.V | PowerBand Solutions Inc | 0.06 | -1.75 | -1.66 |
| SHRG | Sharing Services Global Corp | 5.77 | 0.3 | 0.05 |
| VIPS | Vipshop Holdings Ltd | 0.04 | 0.43 | 0.41 |
| VTEQ | Veriteq Corp | 125.5 | 1.01 | 0.01 |
| WLTR.V | GOLO Mobile Inc | 0.09 | 0.99 | 0.92 |
| 002280.SZ | Hangzhou Liaison Interactive Information Technology Co Ltd | 5.19 | 1.82 | 0.35 |
| Low | High | |
| Unlevered beta | 0.11 | 0.4 |
| Relevered beta | 0.07 | 0.73 |
| Adjusted relevered beta | 0.38 | 0.82 |
BZUN'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 BZUN:
cost_of_equity (7.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.38) + 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.