126.HK WACC - Weighted Average Cost of Capital

The WACC of Carrianna Group Holdings Company Ltd (126.HK) is 5.6%.

The Cost of Equity of Carrianna Group Holdings Company Ltd (126.HK) is 16.45%.

The Cost of Debt of Carrianna Group Holdings Company Ltd (126.HK) is 5.75%.

	Range	Selected
Cost of equity	7.30% - 25.60%	16.45%
Tax rate	17.80% - 28.00%	22.90%
Cost of debt	4.50% - 7.00%	5.75%
WACC	4.1% - 7.1%	5.6%

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	0.74	3.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	25.60%

Tax rate	17.80%	28.00%
Debt/Equity ratio	9.22	9.22
Cost of debt	4.50%	7.00%

After-tax WACC	4.1%	7.1%


Selected WACC	5.6%

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 (16.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.74) + 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.