1902.HK WACC - Weighted Average Cost of Capital

The WACC of Yincheng International Holding Co Ltd (1902.HK) is 8.5%.

The Cost of Equity of Yincheng International Holding Co Ltd (1902.HK) is 10.75%.

The Cost of Debt of Yincheng International Holding Co Ltd (1902.HK) is 10.95%.

	Range	Selected
Cost of equity	8.10% - 13.40%	10.75%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	7.30% - 14.60%	10.95%
WACC	5.7% - 11.4%	8.5%

WACC

1902.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.88	1.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	13.40%

Tax rate	22.10%	22.30%
Debt/Equity ratio	177.89	177.89
Cost of debt	7.30%	14.60%

After-tax WACC	5.7%	11.4%


Selected WACC	8.5%

1902.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 1902.HK:

cost_of_equity (10.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.88) + 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.