126.HK WACC - Weighted Average Cost of Capital

The WACC of Carrianna Group Holdings Company Ltd (126.HK) is 10.0%.

The Cost of Equity of Carrianna Group Holdings Company Ltd (126.HK) is 7.05%.

The Cost of Debt of Carrianna Group Holdings Company Ltd (126.HK) is 14.05%.

	Range	Selected
Cost of equity	5.50% - 8.60%	7.05%
Tax rate	17.80% - 28.00%	22.90%
Cost of debt	5.20% - 22.90%	14.05%
WACC	4.4% - 15.7%	10.0%

WACC

126.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.44	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	8.60%

Tax rate	17.80%	28.00%
Debt/Equity ratio	9.29	9.29
Cost of debt	5.20%	22.90%

After-tax WACC	4.4%	15.7%


Selected WACC	10.0%

126.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 126.HK:

cost_of_equity (7.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.