1835.HK WACC - Weighted Average Cost of Capital

The WACC of Shanghai Realway Capital Assets Management Co Ltd (1835.HK) is 9.6%.

The Cost of Equity of Shanghai Realway Capital Assets Management Co Ltd (1835.HK) is 8.75%.

The Cost of Debt of Shanghai Realway Capital Assets Management Co Ltd (1835.HK) is 18.95%.

	Range	Selected
Cost of equity	5.80% - 11.70%	8.75%
Tax rate	10.50% - 12.10%	11.30%
Cost of debt	7.00% - 30.90%	18.95%
WACC	5.8% - 13.3%	9.6%

WACC

1835.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.48	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	11.70%

Tax rate	10.50%	12.10%
Debt/Equity ratio	0.12	0.12
Cost of debt	7.00%	30.90%

After-tax WACC	5.8%	13.3%


Selected WACC	9.6%

1835.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 1835.HK:

cost_of_equity (8.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + 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.