1906.HK WACC - Weighted Average Cost of Capital

The WACC of Bonny International Holding Ltd (1906.HK) is 6.6%.

The Cost of Equity of Bonny International Holding Ltd (1906.HK) is 6.15%.

The Cost of Debt of Bonny International Holding Ltd (1906.HK) is 9.40%.

	Range	Selected
Cost of equity	5.10% - 7.20%	6.15%
Tax rate	7.00% - 11.80%	9.40%
Cost of debt	4.20% - 14.60%	9.40%
WACC	4.8% - 8.4%	6.6%

WACC

1906.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.37	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	7.20%

Tax rate	7.00%	11.80%
Debt/Equity ratio	0.25	0.25
Cost of debt	4.20%	14.60%

After-tax WACC	4.8%	8.4%


Selected WACC	6.6%

1906.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 1906.HK:

cost_of_equity (6.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.