1738.HK WACC - Weighted Average Cost of Capital

The WACC of Feishang Anthracite Resources Ltd (1738.HK) is 6.9%.

The Cost of Equity of Feishang Anthracite Resources Ltd (1738.HK) is 21.95%.

The Cost of Debt of Feishang Anthracite Resources Ltd (1738.HK) is 7.05%.

	Range	Selected
Cost of equity	17.70% - 26.20%	21.95%
Tax rate	8.80% - 23.90%	16.35%
Cost of debt	7.00% - 7.10%	7.05%
WACC	7.1% - 6.7%	6.9%

WACC

1738.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.49	3.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.70%	26.20%

Tax rate	8.80%	23.90%
Debt/Equity ratio	14.23	14.23
Cost of debt	7.00%	7.10%

After-tax WACC	7.1%	6.7%


Selected WACC	6.9%

1738.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 1738.HK:

cost_of_equity (21.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.49) + 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.