《風(fēng)電場(chǎng)項(xiàng)目經(jīng)濟(jì)評(píng)價(jià)規(guī)范》(NB-T 31085-2016)英文版

ICS27.180

P61

RecordNumber:×××××-201×NB

EnergySectorStandardofthe

People'sRepublicofChina

PNB/T×××××-201×

CodeforEconomicEvaluationofWindFarm

(EnglishTranslation)

Issuedate:201×-××-××Implementationdate:201×-××-××

IssuedbyNationalEnergyAdministrationofthePeople’sRepublicofChina

Foreword

根據(jù)《國家能源局關(guān)于下達(dá)2012年第二批能源領(lǐng)域行業(yè)標(biāo)準(zhǔn)制(修)訂計(jì)劃的通知》(國

能科技〔2012〕326號(hào))的要求，規(guī)范編制組在總結(jié)風(fēng)電場(chǎng)項(xiàng)目開發(fā)、建設(shè)、運(yùn)營和管理經(jīng)

驗(yàn)的基礎(chǔ)上，依據(jù)國家現(xiàn)行財(cái)稅制度，并在廣泛征求意見的基礎(chǔ)上，結(jié)合風(fēng)電場(chǎng)建設(shè)項(xiàng)目的

特點(diǎn)，制定本規(guī)范。

Themaintechnicalcontentsofthiscodeare:financialevaluation,Nationaleconomic

evaluation,Uncertaintyandriskanalysis,Economiccomparisonofproposals,andFinancial

evaluationofrenovationandextensionproject.

本規(guī)范由國家能源局負(fù)責(zé)管理，由水電水利規(guī)劃設(shè)計(jì)總院提出并負(fù)責(zé)日常管理，由能

源行業(yè)風(fēng)電標(biāo)準(zhǔn)化技術(shù)委員會(huì)風(fēng)電場(chǎng)規(guī)劃設(shè)計(jì)分技術(shù)委員會(huì)負(fù)責(zé)具體技術(shù)內(nèi)容的解釋。執(zhí)行

過程中如有意見或建議，請(qǐng)寄送水電水利規(guī)劃設(shè)計(jì)總院(地址：北京市西城區(qū)六鋪炕北小街

2號(hào)，郵編：100120)。

Thiscodeismanagedbythenationalenergyadministration,proposed

bythegeneralinstituteofhydropowerandwaterconservancyplanning

anddesignandresponsiblefordailymanagement,andexplainedbythe

technicalcommitteeofwindpowerstandardizationtechnicalcommittee

ofenergyindustry.IfyouhaveanycommentsorSuggestionsduringthe

implementation,pleasesendthemtothegeneralinstituteofhydropower

andwaterconservancyplanninganddesign(address:no.2,liupukang

beixiaostreet,xichengdistrict,Beijing,zipcode:100120).

Chiefeditorunit：PowerChinaHebeiElectricPowerEngineeringCo.,Ltd

Participatingunit：JiLinElectricPowerEngineering

DatangHebeiPowerGenerationCo.,Ltd

Themaindrafters：QinchushengYanfuhuaXijinLizhongminTianxiujunLiqinweiZhao

lianjunChenhongjunFengxueminZhangzhiping

Themainreviewers：XiehongwenYiyuechunLi

yulingLijianyingZhaoshengxiaoDongdelanMi

youwanJiangshipingMachengqingZhujianyiLiu

yongWangyaliDengbeichaoLiuhuaqing

ChenxinSunlikunZhangleiLishishengICS27.180NB

P61

RecordNumber:J2182-2016

EnergySectorStandardofthePeople's

RepublicofChina

PNB/T31085-2016

CodeforEconomicEvaluationofWindFarm

(EnglishTranslation)

Issuedate:2016-01-07Implementationdate:2016-06-01

IssuedbyNationalEnergyAdministrationofthePeople’sRepublicofChina

EnergySectorStandardofthePeople's

RepublicofChina

CodeforEconomicEvaluationofWindFarm

NB/T31085-2016

MainlyCompiledby:ChinaRenewableEnergyEngineeringInstitute

Approvedby:NationalEnergyAdministration

Executedon:June1,2016

ChinaElectricPowerPress

2016,Beijing

NationalEnergyAdministration

Announcement

2016NO.1

AccordingtotheNoticeonIssuingMeasuresforStandardizedManagementof

IndustriesinEnergySector(Trial)andRulesforImplementation(NationalEnergy

AdministrationKJ[2009]52),345professionalstandards,consistingof54energy

standards(NB,includingTechnicalSpecificationforConstructionofNuclearPower

ConventionalIslandandBalanceofPlantPart5:TheSystemwithWaterTreatment

andHydrogenGeneration),125electricpowerstandards(DL),and166petroleumand

gasstandards(SY),arepublishedafterapproval.

Attachment:Contentsofprofessionalstandards

NationalEnergyAdministration

January7,2016

Attachment:

Contentsofprofessionalstandards

Number

ReplacedofImplementation

SN.StandardnumberStandardtitleApprovaldate

standardstandarddate

adopted

…

Codefor

Economic

24NB/T31085-20162016-01-072016-06-01

Evaluationof

WindFarm

…

Foreword

AccordingtotherequirementsofNoticeonIssuingtheDevelopment(orRevision)Planof

SecondBatchofEnergyIndustryStandardsin2012byNationalEnergyAdministration(GNKJ[2012]

No.326),thisCodeisformulatedbasedontheexperienceaccumulatedindevelopment,construction,

operationandmanagementofwindfarmprojects,followingthecurrentnationaltaxationsystemand

theextensivecommentssolicited,andcombiningwiththecharacteristicsofwindfarmprojects.

ThisCodemainlyconsistsoffinancialevaluation,nationaleconomicevaluation,uncertainty

andriskanalysis,economiccomparisonofproposals,andfinancialevaluationofrenovationand

extensionproject.

ThisCode,underthechargeofNationalEnergyAdministration,isproposedandmanaged

routinelybyChinaRenewableEnergyEngineeringInstitute.EnergySectorStandardization

TechnicalCommitteeonWindPowerProject—Sub-technicalCommitteeofWindFarmPlanning

andDesignisresponsiblefortheinterpretationofspecifictechnicalcontents.Ifthereareany

commentsorsuggestionsduringtheimplementation,pleasecontact:ChinaRenewableEnergy

EngineeringInstitute(address:No.2,BeixiaojieStreet,Liupukang,Dewai,XichengDistrict,Beijing

100120,China).

Chiefdevelopmentorganization:

PowerChinaHebeiElectricPowerEngineeringCo.,Ltd.

Participatingdevelopmentorganization:

PowerChinaJiLinElectricPowerEngineeringCo.,Ltd.

DatangHebeiPowerGenerationCo.,Ltd.

Maindrafters:

QinChusheng,YanFuhua,XiJin,LiZhongmin,TianXiujun,LiQinwei,ZhaoLianjun,Chen

Hongjun,FengXuemin,ZhangZhiping

Mainreviewers:

XieHongwen,YiYuechun,LiYuling,LiJianying,ZhaoShengxiao,DongDelan,Mi

Youwan,JiangShiping,Machengqing,ZhuJianyi,LiuYong,WangYali,DengBeichao,LiuHuaqing,

ChenXin,SunLikun,ZhangLei,LiShisheng

I

Contents

1GENERALPROVISIONS...............................................................................................................1

2BASICREQUIREMENT.................................................................................................................2

3FINANCIALEVALUATION...........................................................................................................3

3.1FINANCIALBENEFITANDCOSTCALCULATION.............................................................................3

3.2ANALYSISBEFOREFINANCING......................................................................................................6

3.3FINANCINGSOURCEANDPLAN.....................................................................................................6

3.4ANALYSISAFTERFINANCING........................................................................................................9

3.5FINANCIALEVALUATIONINDEX..................................................................................................10

3.6FORMSANDCONCLUSIONS.........................................................................................................13

4NATIONALECONOMICEVALUATION...................................................................................14

4.1GENERALREQUIREMENT.............................................................................................................14

4.2ECONOMICBENEFITANDCOSTCALCULATION...........................................................................14

4.3ECONOMICBENEFITANDCOSTANALYSIS..................................................................................14

5UNCERTAINTYANDRISKANALYSIS.....................................................................................16

6ECONOMICCOMPARISONOFPROPOSALS........................................................................17

7FINANCIALEVALUATIONOFRENOVATIONANDEXTENSIONPROJECT.................18

APPENDIXAPARAMETERSINECONOMICEVALUATION................................................19

APPENDIXBAUXILIARYSHEETSOFFINANCIALANALYSIS...........................................21

APPENDIXCPRIMARYSHEETSOFFINANCIALANALYSIS..............................................24

APPENDIXDPRIMARYSHEETSOFNATIONALECONOMICANALYSIS........................30

APPENDIXESENSITIVITYANALYSISSHEETANDBREAK-EVENPOINTANALYSIS

GRAPH..................................................................................................................................................33

EXPLANATIONOFWORDINGINTHISCODE...........................................................................35

ADDITIONS:EXPLANATIONOFCOMPILATION.......................................................................33

I

1GeneralProvisions

1.0.1ThisCodeisformulatedinordertoadapttotheneedsofthedevelopmentofwindpower

generation,standardizethewindfarmprojecteconomicevaluationwork,guaranteethequalityof

economicevaluation,andimprovethescientificlevelofprojectdecision-making.

1.0.2ThisCodeappliestotheeconomicevaluationofgridconnectedonshoreandoffshorewind

farmproject.

1.0.3Windfarmprojecteconomicevaluationincludingfinancialevaluationandnationaleconomic

evaluation,isbasedonthedifferenceofthewith-projectandthewithout-projectsituations,inthe

useofbothquantitativeanalysisandqualitativeanalysis,withprioritygiventotheformer;andof

bothstaticanalysisanddynamicanalysis,withprioritygiventothelatter.

1.0.4InadditiontotherequirementsstipulatedinthisCode,thewindfarmprojecteconomic

evaluationshallcomplywiththosestipulatedinthecurrentrelevantstandardsofthenation.

1

2BasicRequirement

2.0.1Forwindfarmproject,financialevaluationshouldbecarriedout,aswellasnational

economicevaluation,whennecessary.

2.0.2Accordingtotherelationshipbetweentheprojectsandtheoriginalenterpriseassets,wind

farmprojectsaredividedintonewprojectsandrenovationandextensionprojects.

2.0.3Windfarmprojecteconomicevaluationshouldfollowtheprincipleofscopeconsistencyof

costandbenefitcalculationandreliabledeterminationofevaluationparameters.

2.0.4Windfarmprojectfinancialevaluationincludes,inturn,analysisbeforefinancing,analysis

offinancingplan,analysisafterfinancing,sensitivityanalysisandbreak-evenanalysis.

2.0.5Thecalculationperiodinwindfarmprojecteconomicevaluationcoversconstructionperiod

andoperationperiod.Thebenefitandcostofthewindpowergeneratingunitswhichareputinto

operationbeforecompletionshouldbeincludedintheconstructionperiod.

2.0.6Thepriceoffinancialevaluationshouldusethepriceforecastedbasedonmarketpricesystem.

Followingrequirementsshallbecompliedwithateverystageofthecalculationperiod.

1Inconstructionperiod,relativepricechangesandchangesinthegeneralpricelevel

shouldbeconsidered.

2Inoperatingperiod,theinitialpriceofoperationshouldbepredicted,andconstant

priceshouldbeusedforeachoperatingyear.Ifthetrendofthefuturemarketpricevariationcanbe

judgedreasonably,relativevariablepricecanbeusedtocalculatetheinputsandoutputs.

2.0.7WindpowerprojectconstructioninvestmentcalculationshoulduseVAT(value-added

tax)-inclusiveprices.Inputsandoutputsintheoperatingperiodshouldusethepriceexclusiveof

VAT.

2.0.8Windfarmeconomiccost-benefitanalysisinnationaleconomicevaluationshouldusethe

priceforecastedbasedontheshadowpricesystem,regardlessofgeneralpricelevelchanges.

2

3FinancialEvaluation

3.1FinancialBenefitandCostCalculation

3.1.1Windfarmprojectincomeincludessalesrevenueandsubsidyincome.

3.1.2Salesrevenuemainlyinvolvessalesofelectricityandotherrevenue,Computationformulais

asfollows:

Salesrevenue=on-gridenergy(kW·h)×on-gridtariff(yuan/kW·h)+

otherrevenue(3.1.2)

Where:

Otherrevenue——referstotherevenuearisingfromsellinggoods,providinglaborservices,and

assigningtherighttouseassets,exceptforsalesofelectricity.

3.1.3Subsidyincomemainlyincludestherefund-upon-collectionandrefund-after-collection

VAT,andgovernmentsubsidies.

3.1.4Thecostofthewindfarmprojectincludestotalinvestment,totalcost,taxesandfees.

3.1.5Thetotalinvestmentincludesconstructioninvestment,interestincurredduring

construction(IIDC)andworkingcapital.

3.1.6Constructioninvestmentshouldbedeterminedonthebasisofgivenconstructionscaleand

engineeringtechnicalsolutions.Constructioninvestmentconsistsofcostofauxiliaryworks,cost

ofconstructionandinstallationworks,equipmentcost,otherchargesandreservefunds.

3.1.7IIDCreferstotheinterestincurredduringtheconstructionperiodforraisingdebtcapital

whichwillbeincludedintheoriginalvalueoffixedassetsafterthefacilityisputintooperation.It

shouldbecalculatedaccordingtothedebtcapitalandusesoffundsdefinedinthefinancingplan.

3.1.8ConstructioninvestmentandIIDCrespectivelyformfixedassets,intangibleassetsandother

assetsaccordingtothefollowingstipulations:

1Costofauxiliaryworks,costofconstructionandinstallationworks,equipmentcost,other

chargesexceptforintangibleassetsandotherassets,aswellasreservefundsandIIDCformfixed

assets.

DeductibleVATisnotincludedintheoriginalvalueoffixedassets.DeductibleVATis

calculatedaccordingtotheformula:

DeductibleVAT=(3.1.8)

deductibleequipmentcost

2Costsforpatentrights,non-pate1n+tVeAdTRtaetcehnolog×y,VAgoToRdawtiell,andlanduserightsform

intangibleassets.

3Productionpersonneltrainingandearlymobilizationfees,plusacquisitionexpenses

foradministrativefurniture,instrumentsandproductionfurnitureformotherassets.

3.1.9Workingcapitalshouldbearrangedbeforetheprojectisputintooperationandcalculated

accordingtotheannualproductionbatchandcapacity.Seethecalculationformulasbelow.The

capitalfundshallnotbelessthan30%oftheworkingcapital.

1Breakdownestimationmethodofworkingcapital:

Workingcapital=currentassets-currentliabilities(3.1.9-1)

Currentassets=receivables+prepayment+stock+cash(3.1.9-2)

Currentliabilities=accountspayable+depositreceived(3.1.9-3)

Currentyearworkingcapitalincrements=currentyearworkingcapital-

3

lastyearworkingcapital(3.1.9-4)

Receivables=(3.1.9-5)

annualoperatingcost

annualnumberofturnovers

Stock=(3.1.9-6)

annualmaterialcost

annualnumberofturnovers

Cash=(3.1.9-7)

Annualsalaryandwelfare+annualothercharges

annualnumberofturnovers

Accountspayable=(3.1.9-8)

annualmaterialcost

annualnumberofturnovers

(3.1.9-9)

360

2Indexaexnpnaunaslionnuemstbimeratoiofntumrneothvoedrso=fwTohreksihnogrtecstatpurintaovl:erdays

Workingcapital=windfarminstalledcapacity(kW)×

workingcapitalrate(yuan/kW)(3.1.9-10)

WorkingcapitalratevaluesshouldcomplywiththeprovisionsofAppendixA.

3.1.10Totalcostincludesallthecostsincurredinoperationperiodforthewindfarmproject,and

thecalculationmethodisasfollows:

1Thetotalcostiscalculatedaccordingtothefollowingformula:

Totalcost=materialcost+salaryandwelfare+repaircost+

depreciation+amortization+insurancepremium+

othercharges+financialcost(3.1.10-1)

2Materialcostincludingthematerials,sparepartsforemergencyuse,lowvalueandeasily

worn-outarticlesconsumedbywindfarmoperationandmaintenanceiscalculatedaccordingto

thefollowingformula:

Materialcost=windfarminstalledcapacity(kW)×materialrate(yuan/kW)(3.1.10-2)

MaterialrateshouldcomplywiththeprovisionsofAppendixA.

3Salaryandwelfareincludingpersonnelwages(includingbonuses,allowancesand

subsidies)forwindfarmoperationandmanagement,employeewelfareandmedicalinsurance,

pensioninsurance,unemploymentinsurance,employmentinjuryinsurance,maternityinsurance

andhousingprovidentfundspaidbytheenterpriseiscalculatedaccordingtothefollowing

formula:

Salaryandwelfare=personnelquota(personal)×salary(yuan/person)×

(1+welfarecostcoefficient)(3.1.10-3)

SalaryandwelfarecoefficientshouldcomplywiththeprovisionsofAppendixA.

4Repaircostisthechargeincurredbynecessaryrepairingtokeepwindfarmoperatingwell

andfunctioningeffectively.Repaircostiscalculatedbythefollowingformulaaccordingtothe

windfarmoperationconditionsandoverhaulplan,combiningwiththewearconditionofthefixed

assets,inuseofwithholdingapproach:

Annualrepaircost＝originalvalueoffixedassets(IIDCdeducted))×

repairrate×productionrate(3.1.10-4)

RepairrateandoperationrateshallcomplywiththeprovisionsofAppendixA.

5Depreciationisthemonetaryestimateoftheconsumedvalueinuseofthewindfarm

fixedassets,andtheannualshareofthecostiscalculatedaccordingtoitsvalueanddepreciable

life.Depreciationofwindfarmprojectshouldusestraight-linemethodandbecalculated

4

accordingtothefollowingformula:

Annualdepreciation=×originalvalueoffixedassets

1?Residualsrateoffixedassets

depreciablelife(3.1.10-5)

ResidualrateoffixedassetanddepreciablelifeshallcomplywiththeprovisionsofAppendix

A.

6Amortizationistheshareofthecostfortheintangibleassetsandotherassetswithina

certainperiod;straight-linemethodcanbeused,regardlessoftheresidualvalue.Itiscalculated

accordingtothefollowingformula:

Annualamortization=(3.1.10-6)

intangibleassets+otherassets

IntangibleassetsperiodandotherassetsamAomrotritzizaattiionppereioridodshallcomplywiththeprovisions

ofAppendixA.

7Insurancepremiumiscalculatedaccordingtothefollowingformula:

Premium=originalvalueoffixedassets×premiumrate(%)(3.1.10-7)

PremiumrateshallcomplywiththeprovisionsofAppendixA.

8Otherchargesincludethethosethatdonotbelongtotheabovebutshouldbeincludedin

thetotalcostofwindfarm,includingcompanyexpense,unionexpense,employeeeducation

expense,laborinsurancepremium,boardofdirectorsfee,consultingfee,intermediaryfees,legal

fee,businessentertainmentexpense,technologytransferfee,researchanddevelopmentexpense,

propertytax,vehicleandvesselusetax,landusetax,andstampduty.Otherchargescanbe

calculatedbyrate.Inaddition,otherchargesalsoincludechargeforseaareautilizationandland

rentalfee,etc.occurredduringtheoperationperiodofthewindfarmproject.Otherchargesare

calculatedaccordingtothefollowingformula:

Othercharges=windfarminstalledcapacity(kW)×otherchargesrate(yuan/kW)+

chargeforseaareautilization+landrentalfee(3.1.10-8)

OtherchargesrateshallcomplywiththeprovisionsofAppendixA.

9Financialcostisthechargeforraisingfundsintheprocessofwindfarmproductionand

operation,beingcalculatedaccordingtothefollowingformula:

Financialcost=interestexpense+exchangenetloss+closingcosts+

otherfeesforraisingfunds(3.1.10-9)

Interestexpensesarecalculatedaccordingtothedebtcapitalofthefinancingplan.

3.1.11TaxesandfeesrefertotheVAT,salestaxsurchargesandincometaxincurredintheprocess

ofwindfarmproductionandoperation,andarecalculatedaccordingtothefollowingformula:

1VATiscalculatedaccordingtothefollowingformula:

PayableVAT=outputtax-inputtax(3.1.11-1)

Outputtax=salesrevenue×taxrate(3.1.11-2)

Inputtax=fixedassetsVATdeduction+totalcostinputtax(3.1.11-3)

Where：

thetotalcostinputtax——materialinputtaxandrepairinputtax

2Salestaxsurchargesincludeurbanmaintenanceandconstructiontaxandeducation

surcharge,andarecalculatedaccordingtothefollowingformula:

Urbanmaintenanceandconstructiontax=payableVAT×

urbanmaintenanceandconstructiontaxrate(3.1.11-4)

5

Educationsurcharge=payableVAT×educationsurchargerate(3.1.11-5)

3Incometaxiscalculatedaccordingtothefollowingformula:

Incometax=(salesrevenue+taxablesubsidiesrevenue-

deductions-thelossofthepreviousyearsallowedformakeup)×

incometaxrate(3.1.11-6)

Where：

salesrevenue——revenueexcludingVAT;

taxablesubsidiesrevenue——drawbackandothertaxablesubsidiesrevenue;

deductions——allowabledeductionsfromcosts,charges,taxesandotherexpenses;

thelossofthepreviousyearsallowedformakeup——thelossesoftaxyearperiodthatare

carriedforwardtothenextyears.

3.2AnalysisBeforeFinancing

3.2.1Analysisbeforefinancingonlyinvolvesprofitabilityanalysis.

3.2.2Incashflowanalysisbeforefinancing,allthecostsandincometaxesshouldbecalculated

withoutconsiderationofinterests.ThetotalinvestmentexcludesIIDC.Totalcostexcludesthe

interestexpenses,andtheincometaxisrecalculated.

3.2.3Financialprofitabilitybeforeincometaxreflectstheeconomicrationalityofwindfarm

projectanditsengineeringtechnicalproposal;mainindexesincludeprojectinvestmentfinancial

internalrateofreturn(FIRR)andfinancialnetpresentvalue(FNPV).Itshallmeetthefollowing

requirements:

1FIRRshouldbegreaterthanthepre-financingandpre-taxfinancialhurdlerateofthe

windpowerindustry.

2Ifthefinancialprofitabilitybeforeincometaxfailstomeettherequirements,thewind

farmengineeringtechnicalsolutionshouldbeadjusted.

3.2.4Financialprofitabilityafterincometaxcanbeusedtojudgethecontributiontotheenterprise

valueofwindpowerprojectinvestmentwithoutconsideringfinancingsolutions.

3.3FinancingSourceandPlan

3.3.1Projectfinancingisdividedonthebasisofdifferententitiesintoboththeexistinglegalentity

financingandnewlegalentityfinancing,namely,corporatefinancingandprojectfinancing.

3.3.2Projectfundingsourcescanbecategorizedasprojectcapitalanddebtcapital.

3.3.3Themethodsofraisingprojectcapitalshouldbebasedonthecharacteristicsofproject

financingentity,andbechosenaccordingtothefollowings:

1Theaddedcapitalofexistinglegalpersonfinanceprojectscanberaisedbythecapital

increaseandshareenlargementbyoriginalshareholder,newshareholderinvestment,issuanceof

stock,governmentinvestment,etc.Investorscanmakecapitalcontributionsincashorinkind,with

industrialpropertyright,non-patentedtechnology,landuseright,resourcesminingrights,etc.as

capital,whichshallmeettherequirementsofrelevantnationalregulations.

2Thecapitalofnewlegalpersonfinancingprojectscanberaisedbytheshareholderdirect

investment,issuanceofstock,governmentinvestment,etc.

3.3.4Debtcapitalsourcescanincludecommercialbankloans,policybankloans,corporatebonds

andfinancinglease,etc.

6

3.3.5Itshouldbeanalyzedwhetherthewindpowerprojectcapitalanddebtcapitalintermsof

quantityandtimeschedulecanmeettheprojectrequirements.

3.3.6Theratioofwindpowerprojectcapitaltodebtcapitalshallcomplywithrelevantstate

regulations,creditregulationsoffinancialinstitutionsandrequirementsofcreditorson

asset-liabilityratios,satisfytheequityinvestor’sexpectationsforinvestmentreturn,andguard

againstfinancialrisks.Theratioofcapitaltodebtshallmeetthefollowingrequirements:

1Reasonablydeterminetheproportionofallkindsofloananddebtaccordingtodebt

financingconditionsofcreditors,,inordertoreducethefinancingcostandfinancingrisk.

2Reasonablyallocatetheshort-termdebtandmid-and-longtermdebt.

3Reasonablyarrangetherepaymentorderofdebtcapital.

4Reasonablydefineinterestratestructure.

3.3.7Theequitycapitalcost,debtcapitalcostandtheweightedaveragecostofcapital(WACC)

canbecalculatedaccordingtothefollowingmethodandformula:

1Thecapitalassetpricingmodel,pre-taxcostofdebtandriskpremium,anddividend

growthmodelcanbeusedtocalculatethecostofequitycapital;alternatively,itmayusethe

investor'sexpectedrateofreturnorexistingreturnonequit