1859.HK WACC - Weighted Average Cost of Capital

The WACC of China Bright Culture Group (1859.HK) is 11.1%.

The Cost of Equity of China Bright Culture Group (1859.HK) is 9.90%.

The Cost of Debt of China Bright Culture Group (1859.HK) is 17.10%.

	Range	Selected
Cost of equity	7.90% - 11.90%	9.90%
Tax rate	13.70% - 30.40%	22.05%
Cost of debt	17.10% - 17.10%	17.10%
WACC	10.2% - 11.9%	11.1%

WACC

1859.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.83	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	11.90%

Tax rate	13.70%	30.40%
Debt/Equity ratio	0.5	0.5
Cost of debt	17.10%	17.10%

After-tax WACC	10.2%	11.9%


Selected WACC	11.1%

1859.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 1859.HK:

cost_of_equity (9.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.