China Life Insurance Co Ltd
SSE:601628

Watchlist Manager
China Life Insurance Co Ltd Logo
China Life Insurance Co Ltd
SSE:601628
Watchlist
Price: 41.54 CNY 0.27% Market Closed
Market Cap: 865B CNY
Have any thoughts about
China Life Insurance Co Ltd?
Write Note

Discount Rate

Cost of Equity
Discount Rate

4.94%
Cost of Equity
1.7%
Risk-Free Rate
0.8
Beta
4.06%
ERP

China Life Insurance Co Ltd's Cost of Equity, calculated using the formula Risk-Free Rate + Beta x ERP, stands at 4.94%. The Beta, indicating the stock's volatility relative to the market, is 0.8, while the current Risk-Free Rate, based on government bond yields, is 1.7%, and the ERP, measuring the extra return over the risk-free rate required by investors, is 4.06%.

Loading Cost of Equity History...

What is China Life Insurance Co Ltd's discount rate?

China Life Insurance Co Ltd 's current Cost of Equity is 4.94%.

In the valuation of banks and insurance companies, only the cost of equity is used due to their unique capital structures and regulatory environments.

These institutions heavily rely on debt, regulated more stringently than other industries, making the Weighted Average Cost of Capital (WACC) less applicable and accurate for them. The cost of equity offers a more direct measure of the risk and return expectations relevant to these specific sectors.

How is Cost of Equity for China Life Insurance Co Ltd calculated?

The Cost of Equity represents the return a company must offer investors to compensate for the risk of investing in its stock. It's calculated using the Capital Asset Pricing Model (CAPM), which combines the risk-free rate, the stock's beta, and the equity risk premium (ERP).

This model considers the inherent risk of investing in the stock compared to a risk-free investment and the market's overall risk.

Here is how we calculate the cost of equity for China Life Insurance Co Ltd

Cost of Equity
4.94%
=
Risk-Free Rate
1.7%
+
Beta
0.8
x
ERP
4.06%
Back to Top
ALPHA SPREAD
Follow us
Join more than 210,400+ value investors using Alpha Spread
Create a free account
or see our plans & pricing

Company

About Us Careers Pricing Affiliate Program Terms of Service Privacy Policy

Help

What is Intrinsic Value? Help Center Contact Us

Tools

Stock Screener Intrinsic Value Calculator DCF Value Calculator Discount Rate Calculator

Stocks

Most Undervalued Stocks Wide Economic Moat Stocks High Profitability Stocks High Solvency Stocks Most Popular Stocks

© 2024 Alpha Spread Limited. All Rights Reserved.

www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.