1628.HK WACC - Weighted Average Cost of Capital

The WACC of Yuzhou Group Holdings Co Ltd (1628.HK) is 5.5%.

The Cost of Equity of Yuzhou Group Holdings Co Ltd (1628.HK) is 49.60%.

The Cost of Debt of Yuzhou Group Holdings Co Ltd (1628.HK) is 6.05%.

	Range	Selected
Cost of equity	30.70% - 68.50%	49.60%
Tax rate	0.80% - 22.60%	11.70%
Cost of debt	5.10% - 7.00%	6.05%
WACC	5.2% - 5.9%	5.5%

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	4.66	9.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	30.70%	68.50%

Tax rate	0.80%	22.60%
Debt/Equity ratio	142.84	142.84
Cost of debt	5.10%	7.00%

After-tax WACC	5.2%	5.9%


Selected WACC	5.5%

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 (49.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.66) + 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.