The WACC of Beijing Enterprises Clean Energy Group Ltd (1250.HK) is 6.2%.
Range | Selected | |
Cost of equity | 7.8% - 23.7% | 15.75% |
Tax rate | 17.4% - 24.1% | 20.75% |
Cost of debt | 4.4% - 8.1% | 6.25% |
WACC | 4.1% - 8.3% | 6.2% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.82 | 2.84 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.8% | 23.7% |
Tax rate | 17.4% | 24.1% |
Debt/Equity ratio | 7.08 | 7.08 |
Cost of debt | 4.4% | 8.1% |
After-tax WACC | 4.1% | 8.3% |
Selected WACC | 6.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
1250.HK | Beijing Enterprises Clean Energy Group Ltd | 7.08 | 0.56 | 0.08 |
000862.SZ | Ning Xia Yin Xing Energy Co Ltd | 0.46 | 1.01 | 0.73 |
1257.HK | China Everbright Greentech Ltd | 11.82 | 0.76 | 0.07 |
182.HK | Concord New Energy Group Ltd | 4.68 | 0.47 | 0.1 |
295.HK | Kong Sun Holdings Ltd | 9.49 | 1 | 0.12 |
451.HK | GCL New Energy Holdings Ltd | 0.74 | 0.72 | 0.45 |
686.HK | Beijing Energy International Holding Co Ltd | 30.91 | 0.72 | 0.03 |
BCPG.BK | BCPG PCL | 1.49 | 1.88 | 0.86 |
JPPOWER.NS | Jaiprakash Power Ventures Ltd | 0.33 | 1.01 | 0.8 |
SPCG.BK | SPCG PCL | 0 | 0.96 | 0.96 |
Low | High | |
Unlevered beta | 0.11 | 0.57 |
Relevered beta | 0.73 | 3.75 |
Adjusted relevered beta | 0.82 | 2.84 |
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 1250.HK:
cost_of_equity (15.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.82) + 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.