1786.HK WACC - Weighted Average Cost of Capital

The WACC of Crcc High-Tech Equipment Corp Ltd (1786.HK) is 10.5%.

The Cost of Equity of Crcc High-Tech Equipment Corp Ltd (1786.HK) is 13.30%.

The Cost of Debt of Crcc High-Tech Equipment Corp Ltd (1786.HK) is 5.00%.

	Range	Selected
Cost of equity	11.50% - 15.10%	13.30%
Tax rate	6.20% - 7.20%	6.70%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.3% - 11.7%	10.5%

WACC

1786.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.45	1.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	15.10%

Tax rate	6.20%	7.20%
Debt/Equity ratio	0.49	0.49
Cost of debt	5.00%	5.00%

After-tax WACC	9.3%	11.7%


Selected WACC	10.5%

1786.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 1786.HK:

cost_of_equity (13.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.45) + 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.