CBPO WACC - Weighted Average Cost of Capital
The WACC of China Biologic Products Holdings Inc (CBPO) is 7.4%.
| Range | Selected | |
| Cost of equity | 7.6% - 13.7% | 10.65% |
| Tax rate | 15.9% - 16.3% | 16.1% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 8.9% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.04 | 1.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 13.7% |
| Tax rate | 15.9% | 16.3% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 8.9% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CBPO | China Biologic Products Holdings Inc | 1.2 | 0.42 | 0.21 |
| AGIO | Agios Pharmaceuticals Inc | 0.92 | 1.67 | 0.94 |
| ENTA | Enanta Pharmaceuticals Inc | 0.01 | 1.82 | 1.81 |
| INSM | Insmed Inc | 0.06 | 1 | 0.95 |
| ORGO | Organogenesis Holdings Inc | 0 | 1.98 | 1.97 |
| PTCT | PTC Therapeutics Inc | 0.63 | 1.44 | 0.94 |
| SRRK | Scholar Rock Holding Corp | 0.01 | 2.28 | 2.25 |
| TVTX | Travere Therapeutics Inc | 0.26 | 1.55 | 1.27 |
| TWST | Twist Bioscience Corp | 0.91 | 2.08 | 1.18 |
| VCEL | Vericel Corp | 0 | 0.83 | 0.83 |
| 1801.HK | Innovent Biologics Inc | 0.02 | 0.64 | 0.63 |
| Low | High | |
| Unlevered beta | 0.94 | 1.18 |
| Relevered beta | 1.06 | 2.22 |
| Adjusted relevered beta | 1.04 | 1.82 |
CBPO'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 CBPO:
cost_of_equity (10.65%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.04) + 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.