SXTC WACC - Weighted Average Cost of Capital
The WACC of China SXT Pharmaceuticals Inc (SXTC) is 6.0%.
| Range | Selected | |
| Cost of equity | 5.4% - 6.9% | 6.15% |
| Tax rate | 0.6% - 3.0% | 1.8% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.3% - 6.7% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.33 | 0.37 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 6.9% |
| Tax rate | 0.6% | 3.0% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.3% | 6.7% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SXTC | China SXT Pharmaceuticals Inc | 0.09 | 1.39 | 1.27 |
| CHHE | China Health Industries Holdings Inc | 78639.3 | 0.4 | 0 |
| DROP | Fuse Science Inc | 3.36 | 1.19 | 0.28 |
| EVE.V | Eve & Co Inc | 5.29 | 0.89 | 0.14 |
| GBLP | Global Pharmatech Inc | 0.03 | 0.12 | 0.12 |
| GENX.V | GenixPharmaceucticals Corporation | 0.6 | -0.51 | -0.32 |
| KGKG | Kona Gold Beverage Inc | 1209.24 | 1.59 | 0 |
| LQWC | Lifequest World Corp | 3.27 | -1.21 | -0.29 |
| NWYU | New You Inc | 67.79 | 0.99 | 0.01 |
| VPI.V | Vitality Products Inc | 0 | -1.11 | -1.11 |
| Low | High | |
| Unlevered beta | 0 | 0.06 |
| Relevered beta | 0 | 0.06 |
| Adjusted relevered beta | 0.33 | 0.37 |
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 (6.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.