1743.HK WACC - Weighted Average Cost of Capital

The WACC of Zhejiang Cangnan Instrument Group Co Ltd (1743.HK) is 8.8%.

The Cost of Equity of Zhejiang Cangnan Instrument Group Co Ltd (1743.HK) is 9.05%.

The Cost of Debt of Zhejiang Cangnan Instrument Group Co Ltd (1743.HK) is 4.30%.

	Range	Selected
Cost of equity	7.80% - 10.30%	9.05%
Tax rate	13.40% - 13.80%	13.60%
Cost of debt	4.00% - 4.60%	4.30%
WACC	7.6% - 10.0%	8.8%

WACC

1743.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.89	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	10.30%

Tax rate	13.40%	13.80%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.00%	4.60%

After-tax WACC	7.6%	10.0%


Selected WACC	8.8%

1743.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 1743.HK:

cost_of_equity (9.05%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.89) + 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.