1257.HK WACC - Weighted Average Cost of Capital

The WACC of China Everbright Greentech Ltd (1257.HK) is 5.7%.

The Cost of Equity of China Everbright Greentech Ltd (1257.HK) is 10.05%.

The Cost of Debt of China Everbright Greentech Ltd (1257.HK) is 6.85%.

	Range	Selected
Cost of equity	8.40% - 11.70%	10.05%
Tax rate	19.60% - 23.10%	21.35%
Cost of debt	6.70% - 7.00%	6.85%
WACC	5.6% - 5.8%	5.7%

WACC

1257.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.92	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.40%	11.70%

Tax rate	19.60%	23.10%
Debt/Equity ratio	12.72	12.72
Cost of debt	6.70%	7.00%

After-tax WACC	5.6%	5.8%


Selected WACC	5.7%

1257.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 1257.HK:

cost_of_equity (10.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.92) + 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.