139.HK WACC - Weighted Average Cost of Capital

The WACC of Central Wealth Group Holdings Ltd (139.HK) is 6.6%.

The Cost of Equity of Central Wealth Group Holdings Ltd (139.HK) is 6.45%.

The Cost of Debt of Central Wealth Group Holdings Ltd (139.HK) is 6.80%.

	Range	Selected
Cost of equity	5.20% - 7.70%	6.45%
Tax rate	-% - 0.20%	0.10%
Cost of debt	6.60% - 7.00%	6.80%
WACC	5.8% - 7.4%	6.6%

WACC

139.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.31	0.48

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.20%	7.70%

Tax rate	-%	0.20%
Debt/Equity ratio	0.7	0.7
Cost of debt	6.60%	7.00%

After-tax WACC	5.8%	7.4%


Selected WACC	6.6%

139.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 139.HK:

cost_of_equity (6.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.31) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.