PME WACC - Weighted Average Cost of Capital
The WACC of Pingtan Marine Enterprise Ltd (PME) is 6.6%.
| Range | Selected | |
| Cost of equity | 5.0% - 7.2% | 6.1% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 8.9% - 9.1% | 9% |
| WACC | 6.5% - 6.7% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.14 | 0.33 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.0% | 7.2% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 16.8 | 16.8 |
| Cost of debt | 8.9% | 9.1% |
| After-tax WACC | 6.5% | 6.7% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PME | Pingtan Marine Enterprise Ltd | 16.8 | -0.71 | -0.05 |
| AGRO | Adecoagro SA | 1.18 | -0.17 | -0.09 |
| ASRE | Astra Energy Inc | 1.58 | 1.64 | 0.76 |
| BIQIF | BIQI International Holdings Corp | 213616.16 | 0 | 0 |
| CUSI | Cuisine Solutions Inc | 0.02 | -0.08 | -0.08 |
| FAMI | Farmmi Inc | 3.45 | 0.34 | 0.1 |
| LUCC | Luca Inc | 0.17 | 1.1 | 0.98 |
| OGO.V | Organto Foods Inc | 0.35 | -0.33 | -0.26 |
| SVIN | Scheid Vineyards Inc | 2.42 | 0.06 | 0.02 |
| UMAM | Umami Sustainable Seafood Inc | 0.85 | 0.57 | 0.35 |
| Low | High | |
| Unlevered beta | -0.02 | 0.05 |
| Relevered beta | -0.28 | 0 |
| Adjusted relevered beta | 0.14 | 0.33 |
PME'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 PME:
cost_of_equity (6.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.14) + 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.