133.HK WACC - Weighted Average Cost of Capital

The WACC of China Merchants China Direct Investments Ltd (133.HK) is 6.2%.

The Cost of Equity of China Merchants China Direct Investments Ltd (133.HK) is 6.15%.

The Cost of Debt of China Merchants China Direct Investments Ltd (133.HK) is 5.00%.

	Range	Selected
Cost of equity	5.20% - 7.10%	6.15%
Tax rate	24.50% - 33.20%	28.85%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.2% - 7.1%	6.2%

WACC

133.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.39	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	7.10%

Tax rate	24.50%	33.20%
Debt/Equity ratio	0	0
Cost of debt	5.00%	5.00%

After-tax WACC	5.2%	7.1%


Selected WACC	6.2%

133.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 133.HK:

cost_of_equity (6.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.39) + 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.