1862.HK WACC - Weighted Average Cost of Capital

The WACC of Jingrui Holdings Ltd (1862.HK) is 5.6%.

The Cost of Equity of Jingrui Holdings Ltd (1862.HK) is 123.60%.

The Cost of Debt of Jingrui Holdings Ltd (1862.HK) is 6.50%.

	Range	Selected
Cost of equity	29.00% - 218.20%	123.60%
Tax rate	6.20% - 22.60%	14.40%
Cost of debt	6.00% - 7.00%	6.50%
WACC	5.6% - 5.7%	5.6%

WACC

1862.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	4.37	30.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	29.00%	218.20%

Tax rate	6.20%	22.60%
Debt/Equity ratio	863.6	863.6
Cost of debt	6.00%	7.00%

After-tax WACC	5.6%	5.7%


Selected WACC	5.6%

1862.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 1862.HK:

cost_of_equity (123.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.37) + 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.