1527.HK WACC - Weighted Average Cost of Capital

The WACC of Zhejiang Tengy Environmental Technology Co Ltd (1527.HK) is 9.2%.

The Cost of Equity of Zhejiang Tengy Environmental Technology Co Ltd (1527.HK) is 11.70%.

The Cost of Debt of Zhejiang Tengy Environmental Technology Co Ltd (1527.HK) is 6.55%.

	Range	Selected
Cost of equity	9.60% - 13.80%	11.70%
Tax rate	26.20% - 29.60%	27.90%
Cost of debt	4.00% - 9.10%	6.55%
WACC	7.3% - 11.2%	9.2%

WACC

1527.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.12	1.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	13.80%

Tax rate	26.20%	29.60%
Debt/Equity ratio	0.54	0.54
Cost of debt	4.00%	9.10%

After-tax WACC	7.3%	11.2%


Selected WACC	9.2%

1527.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 1527.HK:

cost_of_equity (11.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.12) + 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.