1735.HK WACC - Weighted Average Cost of Capital

The WACC of Central Holding Group Co Ltd (1735.HK) is 7.2%.

The Cost of Equity of Central Holding Group Co Ltd (1735.HK) is 6.95%.

The Cost of Debt of Central Holding Group Co Ltd (1735.HK) is 14.25%.

	Range	Selected
Cost of equity	5.80% - 8.10%	6.95%
Tax rate	9.90% - 18.10%	14.00%
Cost of debt	13.90% - 14.60%	14.25%
WACC	6.1% - 8.3%	7.2%

WACC

1735.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.10%

Tax rate	9.90%	18.10%
Debt/Equity ratio	0.05	0.05
Cost of debt	13.90%	14.60%

After-tax WACC	6.1%	8.3%


Selected WACC	7.2%

1735.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 1735.HK:

cost_of_equity (6.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.