Research On Determination For Benchmark Yield Of Renovation Project Of The Shantytowns

It is not a lot that domestic and foreign scholars analyze the determination of benchmark yield of renovation project of the shantytowns.In China,the benchmark yield is generally directly used by industry benchmark yield and sub-industry benchmark yield in the third edition of "construction project economic evaluation methods and parameters" published by the relevant state departments in 2006.But it only announced the benchmark yield on the real estate industry,and did not announce its sub-industry benchmark yield of renovation project of the shantytowns,indicating that the determination of benchmark yield of renovation project of the shantytowns to be in-depth study.The determination of benchmark yield of renovation project of the shantytowns will help the investors to make an objective and accurate analysis of the shantytowns in terms of investment decision-making,financing ability,profitability and so on.It also contributes to the country's macro-control of renovation project of the shantytowns and the development of more effective policies to promote renovation project of the shantytowns.This paper describes the methods and models for determination of benchmark yield,analyzes the advantages and shortcomings of these methods and models,and provides a reference for how to the determination of benchmark yield of renovation project of the shantytowns;combining with the characteristics,the existing problems and the risk of renovation project of the shantytowns in China of building a Capital Asset Pricing Model(CAPM)and the Weighted Average Cost of Capital(WACC)of benchmark yield of renovation project of the shantytowns to calculate.The idea of calculation is divided into two parts: the first part is the use of capital asset pricing model(CAPM)estimates equity capital benchmark yield of renovation project of the shantytowns.Through the comparative analysis of bank interest rate and national interest rate,the final five-year fixed bank deposit rate is4.5% as the risk-free rate of return.The expected market yield is determined by the Shanghai Composite Index and the Shenzhen Composite Index.The estimated result is 18.85%.Data of the market were calculated by regression method,and the result was 1.28.The non-systematic risk was modified by AHP and expert scoring method.The correction coefficient was1.13.The second part uses the Weighted Average Cost of Capital(WACC)to measure the base rate of return for all capital costs on the basis of the first part.Finally,this model will be applied to the actual project in this paper,and the calculated result is 7.85%.The result iscompared with the internal rate of return in the feasibility study report of the project.The benchmark yield of renovation project of the shantytowns estimated in this paper provide reference for renovation project of the shantytowns in investment decision,financing capability,financial analysis and so on,and has certain application value;it also provides reference for economic evaluation parameters in the real estate industry;it also provides reference for the relevant departments making policy for promoting the development of renovation project of the shantytowns.