1823.HK WACC - Weighted Average Cost of Capital

The WACC of Huayu Expressway Group Ltd (1823.HK) is 8.6%.

The Cost of Equity of Huayu Expressway Group Ltd (1823.HK) is 10.15%.

The Cost of Debt of Huayu Expressway Group Ltd (1823.HK) is 5.50%.

	Range	Selected
Cost of equity	8.10% - 12.20%	10.15%
Tax rate	31.40% - 37.80%	34.60%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.9% - 10.4%	8.6%

WACC

1823.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.88	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	12.20%

Tax rate	31.40%	37.80%
Debt/Equity ratio	0.3	0.3
Cost of debt	4.00%	7.00%

After-tax WACC	6.9%	10.4%


Selected WACC	8.6%

1823.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 1823.HK:

cost_of_equity (10.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.88) + 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.