YSG WACC - Weighted Average Cost of Capital
The WACC of Yatsen Holding Ltd (YSG) is 7.1%.
| Range | Selected | |
| Cost of equity | 5.4% - 9.2% | 7.3% |
| Tax rate | 0.3% - 0.4% | 0.35% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.2% - 8.1% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.33 | 0.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 9.2% |
| Tax rate | 0.3% | 0.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.2% | 8.1% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| YSG | Yatsen Holding Ltd | 1.19 | 0.38 | 0.17 |
| CYAN | Cyanotech Corp | 2.43 | -0.21 | -0.06 |
| ELF | e.l.f. Beauty Inc | 0.04 | 1.9 | 1.83 |
| JWEL.TO | Jamieson Wellness Inc | 0.29 | 0.54 | 0.42 |
| MDVL | Medavail Holdings Inc | 1.7 | 0.76 | 0.28 |
| MSLP | MusclePharm Corp | 699.35 | 0.03 | 0 |
| NAII | Natural Alternatives International Inc | 0.59 | -0.11 | -0.07 |
| NTRB | Nutriband Inc | 0 | 1.49 | 1.49 |
| PCGR | Personal Care Group Inc | 0.38 | -0.21 | -0.15 |
| TLCC | Twinlab Consolidated Holdings Inc | 722.81 | 0.71 | 0 |
| VERU | Veru Inc | 0.11 | 0.52 | 0.47 |
| Low | High | |
| Unlevered beta | 0 | 0.28 |
| Relevered beta | 0 | 0.67 |
| Adjusted relevered beta | 0.33 | 0.78 |
YSG'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 YSG:
cost_of_equity (7.30%) = 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.