1845.HK WACC - Weighted Average Cost of Capital

The WACC of Weigang Environmental Technology Holding Group Ltd (1845.HK) is 5.9%.

The Cost of Equity of Weigang Environmental Technology Holding Group Ltd (1845.HK) is 6.25%.

The Cost of Debt of Weigang Environmental Technology Holding Group Ltd (1845.HK) is 5.75%.

	Range	Selected
Cost of equity	5.40% - 7.10%	6.25%
Tax rate	8.40% - 13.10%	10.75%
Cost of debt	4.50% - 7.00%	5.75%
WACC	5.0% - 6.8%	5.9%

WACC

1845.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.42	0.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	7.10%

Tax rate	8.40%	13.10%
Debt/Equity ratio	0.39	0.39
Cost of debt	4.50%	7.00%

After-tax WACC	5.0%	6.8%


Selected WACC	5.9%

1845.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 1845.HK:

cost_of_equity (6.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.42) + 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.