SXTC
China SXT Pharmaceuticals Inc
Price:  
2.28 
USD
Volume:  
196,627.00
China | Pharmaceuticals
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SXTC WACC - Weighted Average Cost of Capital

The WACC of China SXT Pharmaceuticals Inc (SXTC) is 6.2%.

The Cost of Equity of China SXT Pharmaceuticals Inc (SXTC) is 6.30%.
The Cost of Debt of China SXT Pharmaceuticals Inc (SXTC) is 4.25%.

Range Selected
Cost of equity 5.40% - 7.20% 6.30%
Tax rate 0.60% - 3.00% 1.80%
Cost of debt 4.00% - 4.50% 4.25%
WACC 5.3% - 7.0% 6.2%
WACC

SXTC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.34 0.42
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 7.20%
Tax rate 0.60% 3.00%
Debt/Equity ratio 0.08 0.08
Cost of debt 4.00% 4.50%
After-tax WACC 5.3% 7.0%
Selected WACC 6.2%

SXTC'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 SXTC:

cost_of_equity (6.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.