PLIN WACC - Weighted Average Cost of Capital
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 |
PLIN'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 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.