1756.HK WACC - Weighted Average Cost of Capital

The WACC of Huali University Group Ltd (1756.HK) is 6.4%.

The Cost of Equity of Huali University Group Ltd (1756.HK) is 14.45%.

The Cost of Debt of Huali University Group Ltd (1756.HK) is 4.30%.

	Range	Selected
Cost of equity	8.50% - 20.40%	14.45%
Tax rate	4.70% - 7.10%	5.90%
Cost of debt	4.00% - 4.60%	4.30%
WACC	4.9% - 8.0%	6.4%

WACC

1756.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.94	2.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	20.40%

Tax rate	4.70%	7.10%
Debt/Equity ratio	3.35	3.35
Cost of debt	4.00%	4.60%

After-tax WACC	4.9%	8.0%


Selected WACC	6.4%

1756.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 1756.HK:

cost_of_equity (14.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.94) + 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.