PRH.V WACC - Weighted Average Cost of Capital
The WACC of Pearl River Holdings Ltd (PRH.V) is 11.7%.
| Range | Selected | |
| Cost of equity | 5.1% - 6.7% | 5.9% |
| Tax rate | 8.3% - 18.7% | 13.5% |
| Cost of debt | 13.7% - 20.9% | 17.3% |
| WACC | 10.0% - 13.4% | 11.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.23 | 0.29 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 6.7% |
| Tax rate | 8.3% | 18.7% |
| Debt/Equity ratio | 1.91 | 1.91 |
| Cost of debt | 13.7% | 20.9% |
| After-tax WACC | 10.0% | 13.4% |
| Selected WACC | 11.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PRH.V | Pearl River Holdings Ltd | 1.91 | -0.45 | -0.17 |
| ADMT | ADM Tronics Unlimited Inc | 0.13 | -0.09 | -0.08 |
| CHCC | China Chemical Corp | 2.04 | 0.26 | 0.09 |
| FFHL | Fuwei Films (Holdings) Co Ltd | 0 | 0.91 | 0.91 |
| GDNP.V | Good Natured Products Inc | 34.63 | -1.11 | -0.04 |
| GLGI | Greystone Logistics Inc | 0.37 | -0.04 | -0.03 |
| GURE | Gulf Resources Inc | 0.16 | -0.62 | -0.54 |
| MX.TO | Methanex Corp | 1.47 | 1.96 | 0.86 |
| SINC | Sincerity Applied Materials Holdings Corp | 1.33 | -0.95 | -0.44 |
| TREC | Trecora Resources | 0.18 | 0.3 | 0.26 |
| Low | High | |
| Unlevered beta | -0.05 | 0.02 |
| Relevered beta | -0.15 | -0.06 |
| Adjusted relevered beta | 0.23 | 0.29 |
PRH.V'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 PRH.V:
cost_of_equity (5.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.23) + 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.