1829.HK
China Machinery Engineering Corp
Price:  
3.68 
HKD
Volume:  
3,082,800
China | Construction & Engineering

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 7.1%.

RangeSelected
Cost of equity8.1% - 11.2%9.65%
Tax rate24.1% - 24.3%24.2%
Cost of debt4.0% - 10.2%7.1%
WACC7.8% - 11.0%9.4%
WACC

1829.HK WACC calculation

CategoryLowHigh
Long-term bond rate3.0%3.5%
Equity market risk premium5.3%6.3%
Adjusted beta0.961.13
Additional risk adjustments0.0%0.5%
Cost of equity8.1%11.2%
Tax rate24.1%24.3%
Debt/Equity ratio
0.070.07
Cost of debt4.0%10.2%
After-tax WACC7.8%11.0%
Selected WACC9.4%

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.