1829.HK WACC - Weighted Average Cost of Capital

The WACC of China Machinery Engineering Corp (1829.HK) is 9.4%.

The Cost of Equity of China Machinery Engineering Corp (1829.HK) is 9.65%.

The Cost of Debt of China Machinery Engineering Corp (1829.HK) is 7.10%.

	Range	Selected
Cost of equity	8.10% - 11.20%	9.65%
Tax rate	24.10% - 24.30%	24.20%
Cost of debt	4.00% - 10.20%	7.10%
WACC	7.8% - 11.0%	9.4%

WACC

1829.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.96	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	11.20%

Tax rate	24.10%	24.30%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	10.20%

After-tax WACC	7.8%	11.0%


Selected WACC	9.4%

1829.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 1829.HK:

cost_of_equity (9.65%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.96) + 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.