1628.HK WACC - Weighted Average Cost of Capital

The WACC of Yuzhou Group Holdings Co Ltd (1628.HK) is 4.9%.

The Cost of Equity of Yuzhou Group Holdings Co Ltd (1628.HK) is 35.45%.

The Cost of Debt of Yuzhou Group Holdings Co Ltd (1628.HK) is 5.50%.

	Range	Selected
Cost of equity	17.10% - 53.80%	35.45%
Tax rate	0.80% - 22.60%	11.70%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.1% - 5.8%	4.9%

WACC

1628.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.38	7.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.10%	53.80%

Tax rate	0.80%	22.60%
Debt/Equity ratio	140.71	140.71
Cost of debt	4.00%	7.00%

After-tax WACC	4.1%	5.8%


Selected WACC	4.9%

1628.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 1628.HK:

cost_of_equity (35.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.38) + 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.