1508.HK WACC - Weighted Average Cost of Capital

The WACC of China Reinsurance Group Corp (1508.HK) is 10.6%.

The Cost of Equity of China Reinsurance Group Corp (1508.HK) is 13.15%.

The Cost of Debt of China Reinsurance Group Corp (1508.HK) is 5.00%.

	Range	Selected
Cost of equity	11.80% - 14.50%	13.15%
Tax rate	18.10% - 19.20%	18.65%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.6% - 11.6%	10.6%

WACC

1508.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.49	1.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	14.50%

Tax rate	18.10%	19.20%
Debt/Equity ratio	0.39	0.39
Cost of debt	5.00%	5.00%

After-tax WACC	9.6%	11.6%


Selected WACC	10.6%

1508.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 1508.HK:

cost_of_equity (13.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.49) + 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.