1542.HK WACC - Weighted Average Cost of Capital

The WACC of Taizhou Water Group Co Ltd (1542.HK) is 9.9%.

The Cost of Equity of Taizhou Water Group Co Ltd (1542.HK) is 16.75%.

The Cost of Debt of Taizhou Water Group Co Ltd (1542.HK) is 13.85%.

	Range	Selected
Cost of equity	8.30% - 25.20%	16.75%
Tax rate	25.20% - 30.40%	27.80%
Cost of debt	4.80% - 22.90%	13.85%
WACC	3.7% - 16.1%	9.9%

WACC

1542.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.91	3.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	25.20%

Tax rate	25.20%	30.40%
Debt/Equity ratio	51.26	51.26
Cost of debt	4.80%	22.90%

After-tax WACC	3.7%	16.1%


Selected WACC	9.9%

1542.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 1542.HK:

cost_of_equity (16.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.91) + 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.