154.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Enterprises Environment Group Ltd (154.HK) is 6.0%.

The Cost of Equity of Beijing Enterprises Environment Group Ltd (154.HK) is 24.60%.

The Cost of Debt of Beijing Enterprises Environment Group Ltd (154.HK) is 4.25%.

	Range	Selected
Cost of equity	20.70% - 28.50%	24.60%
Tax rate	14.30% - 18.70%	16.50%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.5% - 6.6%	6.0%

WACC

154.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.98	3.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.70%	28.50%

Tax rate	14.30%	18.70%
Debt/Equity ratio	7.43	7.43
Cost of debt	4.00%	4.50%

After-tax WACC	5.5%	6.6%


Selected WACC	6.0%

154.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 154.HK:

cost_of_equity (24.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.98) + 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.