FFHL
Fuwei Films (Holdings) Co Ltd
Price:  
8.3 
USD
Volume:  
6,026
China | Chemicals

FFHL WACC - Weighted Average Cost of Capital

The WACC of Fuwei Films (Holdings) Co Ltd (FFHL) is 7.3%.

The Cost of Equity of Fuwei Films (Holdings) Co Ltd (FFHL) is 7.35%.
The Cost of Debt of Fuwei Films (Holdings) Co Ltd (FFHL) is 5.75%.

RangeSelected
Cost of equity6.0% - 8.7%7.35%
Tax rate10.5% - 18.3%14.4%
Cost of debt4.5% - 7.0%5.75%
WACC6.0% - 8.7%7.3%
WACC

FFHL WACC calculation

CategoryLowHigh
Long-term bond rate4.2%4.7%
Equity market risk premium5.0%6.0%
Adjusted beta0.360.59
Additional risk adjustments0.0%0.5%
Cost of equity6.0%8.7%
Tax rate10.5%18.3%
Debt/Equity ratio
00
Cost of debt4.5%7.0%
After-tax WACC6.0%8.7%
Selected WACC7.3%

FFHL'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 FFHL:

cost_of_equity (7.35%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.36) + 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.