1640.HK WACC - Weighted Average Cost of Capital

The WACC of Ruicheng China Media Group Ltd (1640.HK) is 6.3%.

The Cost of Equity of Ruicheng China Media Group Ltd (1640.HK) is 6.30%.

The Cost of Debt of Ruicheng China Media Group Ltd (1640.HK) is 10.65%.

	Range	Selected
Cost of equity	5.30% - 7.30%	6.30%
Tax rate	32.10% - 46.70%	39.40%
Cost of debt	6.70% - 14.60%	10.65%
WACC	5.2% - 7.3%	6.3%

WACC

1640.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.4	0.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	7.30%

Tax rate	32.10%	46.70%
Debt/Equity ratio	0.04	0.04
Cost of debt	6.70%	14.60%

After-tax WACC	5.2%	7.3%


Selected WACC	6.3%

1640.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 1640.HK:

cost_of_equity (6.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.4) + 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.