The WACC of Sino Agro Food Inc (SIAF) is 3.1%.
Range | Selected | |
Cost of equity | 9.5% - 128.2% | 68.85% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 3.0% - 3.3% | 3.1% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 1.22 | 22.03 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.5% | 128.2% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 2133.94 | 2133.94 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 3.0% | 3.3% |
Selected WACC | 3.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SIAF | Sino Agro Food Inc | 2133.94 | 2.02 | 0 |
ALCO | Alico Inc | 0.37 | 0.38 | 0.3 |
CUB.V | CubicFarm Systems Corp | 3.46 | -0.35 | -0.1 |
LMNR | Limoneira Co | 0.15 | 0.77 | 0.7 |
MRGO | Margo Caribe Inc | 0.29 | -1.58 | -1.31 |
SANW | S&W Seed Co | 10.29 | 0.98 | 0.12 |
STEV | Stevia Corp | 0.42 | -0.43 | -0.33 |
SVIN | Scheid Vineyards Inc | 2.42 | 0.38 | 0.14 |
YEWB | Yew Bio-Pharm Group Inc | 868.46 | 1.82 | 0 |
Low | High | |
Unlevered beta | 0 | 0.09 |
Relevered beta | 1.33 | 32.39 |
Adjusted relevered beta | 1.22 | 22.03 |
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 SIAF:
cost_of_equity (68.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.22) + 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.