1395.HK
ELL Environmental Holdings Ltd
Price:  
0.14 
HKD
Volume:  
295,000.00
China | Water Utilities
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1395.HK WACC - Weighted Average Cost of Capital

The WACC of ELL Environmental Holdings Ltd (1395.HK) is 7.6%.

The Cost of Equity of ELL Environmental Holdings Ltd (1395.HK) is 8.20%.
The Cost of Debt of ELL Environmental Holdings Ltd (1395.HK) is 9.30%.

Range Selected
Cost of equity 5.90% - 10.50% 8.20%
Tax rate 22.10% - 22.30% 22.20%
Cost of debt 7.20% - 11.40% 9.30%
WACC 5.7% - 9.6% 7.6%
WACC

1395.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.5 0.95
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.90% 10.50%
Tax rate 22.10% 22.30%
Debt/Equity ratio 1.28 1.28
Cost of debt 7.20% 11.40%
After-tax WACC 5.7% 9.6%
Selected WACC 7.6%

1395.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 1395.HK:

cost_of_equity (8.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.