The WACC of Jinhui Shipping and Transportation Ltd (JIN.OL) is 9.4%.
Range | Selected | |
Cost of equity | 7.6% - 10.7% | 9.15% |
Tax rate | 0.1% - 0.2% | 0.15% |
Cost of debt | 4.0% - 15.1% | 9.55% |
WACC | 5.1% - 13.7% | 9.4% |
Category | Low | High |
Long-term bond rate | 3.3% | 3.8% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.83 | 1.05 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.6% | 10.7% |
Tax rate | 0.1% | 0.2% |
Debt/Equity ratio | 2.19 | 2.19 |
Cost of debt | 4.0% | 15.1% |
After-tax WACC | 5.1% | 13.7% |
Selected WACC | 9.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
JIN.OL | Jinhui Shipping and Transportation Ltd | 2.19 | 0.62 | 0.19 |
2020.OL | 2020 Bulkers Ltd | 0.42 | 1.27 | 0.89 |
ANEK.AT | Anonymous Shipping Company of Crete SA | 4.6 | 0.36 | 0.06 |
ATA.WA | ATC Cargo SA | 0.03 | 0.03 | 0.02 |
ATTICA.AT | Attica Holdings SA | 1.22 | 0.73 | 0.33 |
CKN.L | Clarkson PLC | 0.04 | 0.85 | 0.81 |
FJORD.OL | Fjord1 ASA | 1.16 | 0.56 | 0.26 |
IR5B.IR | Irish Continental Group PLC | 0.22 | 1.01 | 0.83 |
OTS.WA | OT Logistics SA | 2.09 | 0.32 | 0.1 |
TAL1T.TL | Tallink Grupp AS | 1.21 | 0.76 | 0.35 |
Low | High | |
Unlevered beta | 0.23 | 0.33 |
Relevered beta | 0.75 | 1.07 |
Adjusted relevered beta | 0.83 | 1.05 |
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 JIN.OL:
cost_of_equity (9.15%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.83) + 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.