1068.HK WACC - Weighted Average Cost of Capital

The WACC of China Yurun Food Group Ltd (1068.HK) is 7.7%.

The Cost of Equity of China Yurun Food Group Ltd (1068.HK) is 10.90%.

The Cost of Debt of China Yurun Food Group Ltd (1068.HK) is 5.50%.

	Range	Selected
Cost of equity	9.10% - 12.70%	10.90%
Tax rate	0.90% - 2.00%	1.45%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.1% - 9.2%	7.7%

WACC

1068.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.05	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	12.70%

Tax rate	0.90%	2.00%
Debt/Equity ratio	1.45	1.45
Cost of debt	4.00%	7.00%

After-tax WACC	6.1%	9.2%


Selected WACC	7.7%

1068.HK'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 1068.HK:

cost_of_equity (10.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.05) + 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.