1610.HK WACC - Weighted Average Cost of Capital

The WACC of COFCO Joycome Foods Ltd (1610.HK) is 7.1%.

The Cost of Equity of COFCO Joycome Foods Ltd (1610.HK) is 10.00%.

The Cost of Debt of COFCO Joycome Foods Ltd (1610.HK) is 5.50%.

	Range	Selected
Cost of equity	8.50% - 11.50%	10.00%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.7% - 8.4%	7.1%

WACC

1610.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.94	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	11.50%

Tax rate	22.10%	22.30%
Debt/Equity ratio	1.05	1.05
Cost of debt	4.00%	7.00%

After-tax WACC	5.7%	8.4%


Selected WACC	7.1%

1610.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 1610.HK:

cost_of_equity (10.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.94) + 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.