1253.HK WACC - Weighted Average Cost of Capital

The WACC of China Greenland Broad Greenstate Group Co Ltd (1253.HK) is 5.4%.

The Cost of Equity of China Greenland Broad Greenstate Group Co Ltd (1253.HK) is 12.65%.

The Cost of Debt of China Greenland Broad Greenstate Group Co Ltd (1253.HK) is 5.50%.

	Range	Selected
Cost of equity	7.70% - 17.60%	12.65%
Tax rate	14.90% - 17.50%	16.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.9% - 7.0%	5.4%

WACC

1253.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.82	1.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	17.60%

Tax rate	14.90%	17.50%
Debt/Equity ratio	8.67	8.67
Cost of debt	4.00%	7.00%

After-tax WACC	3.9%	7.0%


Selected WACC	5.4%

1253.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 1253.HK:

cost_of_equity (12.65%) = 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.