117.HK WACC - Weighted Average Cost of Capital

The WACC of Tianli Holdings Group Ltd (117.HK) is 4.9%.

The Cost of Equity of Tianli Holdings Group Ltd (117.HK) is 6.40%.

The Cost of Debt of Tianli Holdings Group Ltd (117.HK) is 5.50%.

	Range	Selected
Cost of equity	3.70% - 9.10%	6.40%
Tax rate	11.20% - 16.30%	13.75%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.6% - 6.2%	4.9%

WACC

117.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	-0.12	0.53

Additional risk adjustments	1.5%	2.0%
Cost of equity	3.70%	9.10%

Tax rate	11.20%	16.30%
Debt/Equity ratio	9.33	9.33
Cost of debt	4.00%	7.00%

After-tax WACC	3.6%	6.2%


Selected WACC	4.9%

117.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 117.HK:

cost_of_equity (6.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (-0.12) + risk_adjustments (1.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.