1600.HK
China Tian Lun Gas Holdings Ltd
Price:  
2.92 
HKD
Volume:  
683,532.00
China | Gas Utilities
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1600.HK WACC - Weighted Average Cost of Capital

The WACC of China Tian Lun Gas Holdings Ltd (1600.HK) is 6.5%.

The Cost of Equity of China Tian Lun Gas Holdings Ltd (1600.HK) is 13.85%.
The Cost of Debt of China Tian Lun Gas Holdings Ltd (1600.HK) is 5.40%.

Range Selected
Cost of equity 11.90% - 15.80% 13.85%
Tax rate 27.60% - 29.60% 28.60%
Cost of debt 4.80% - 6.00% 5.40%
WACC 5.7% - 7.3% 6.5%
WACC

1600.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.52 1.71
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.90% 15.80%
Tax rate 27.60% 29.60%
Debt/Equity ratio 2.82 2.82
Cost of debt 4.80% 6.00%
After-tax WACC 5.7% 7.3%
Selected WACC 6.5%

1600.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 1600.HK:

cost_of_equity (13.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.52) + 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.