1853.HK
Jilin Province Chuncheng Heating Co Ltd
Price:  
1.37 
HKD
Volume:  
35,000
China | Water Utilities

1853.HK WACC - Weighted Average Cost of Capital

The WACC of Jilin Province Chuncheng Heating Co Ltd (1853.HK) is 7.9%.

The Cost of Equity of Jilin Province Chuncheng Heating Co Ltd (1853.HK) is 7.85%.
The Cost of Debt of Jilin Province Chuncheng Heating Co Ltd (1853.HK) is 5%.

RangeSelected
Cost of equity6.7% - 9.0%7.85%
Tax rate27.3% - 27.9%27.6%
Cost of debt5.0% - 5.0%5%
WACC6.7% - 9.0%7.9%
WACC

1853.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.650.74
Additional risk adjustments0.0%0.5%
Cost of equity6.7%9.0%
Tax rate27.3%27.9%
Debt/Equity ratio
00
Cost of debt5.0%5.0%
After-tax WACC6.7%9.0%
Selected WACC7.9%

1853.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 1853.HK:

cost_of_equity (7.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.65) + 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.