The WACC of China Xiangtai Food Co Ltd (PLIN) is 6.8%.
Range | Selected | |
Cost of equity | 5.1% - 8.6% | 6.85% |
Tax rate | 8.0% - 11.2% | 9.6% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.0% - 8.6% | 6.8% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 4.2% | 5.2% |
Adjusted beta | 0.33 | 0.76 |
Additional risk adjustments | 0.5% | 1.0% |
Cost of equity | 5.1% | 8.6% |
Tax rate | 8.0% | 11.2% |
Debt/Equity ratio | 0.02 | 0.02 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.0% | 8.6% |
Selected WACC | 6.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
PLIN | China Xiangtai Food Co Ltd | 0.02 | 1.1 | 1.07 |
BRID | Bridgford Foods Corp | 0.04 | 0.34 | 0.33 |
CMFO | China Marine Food Group Ltd | 32.75 | -20.32 | -0.66 |
ELAMF | Elamex SA de CV | 0.46 | 0.08 | 0.06 |
JVA | Coffee Holding Co Inc | 0.11 | 0.72 | 0.65 |
LUCC | Luca Inc | 0.17 | 1.1 | 0.95 |
LWAY | Lifeway Foods Inc | 1.11 | 0.72 | 0.36 |
PLAG | Planet Green Holdings Corp | 0.18 | -2.34 | -2.02 |
SWP.TO | Swiss Water Decaffeinated Coffee Inc | 2.91 | 0.81 | 0.22 |
YUII | Yuhe International Inc | 0.11 | -52.18 | -47.35 |
Low | High | |
Unlevered beta | 0.16 | 0.34 |
Relevered beta | 0 | 0.64 |
Adjusted relevered beta | 0.33 | 0.76 |
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 PLIN:
cost_of_equity (6.85%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.33) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.