1907.HK WACC - Weighted Average Cost of Capital

The WACC of China Risun Group Ltd (1907.HK) is 12.4%.

The Cost of Equity of China Risun Group Ltd (1907.HK) is 20.00%.

The Cost of Debt of China Risun Group Ltd (1907.HK) is 12.90%.

	Range	Selected
Cost of equity	15.10% - 24.90%	20.00%
Tax rate	17.50% - 21.90%	19.70%
Cost of debt	5.90% - 19.90%	12.90%
WACC	7.2% - 17.6%	12.4%

WACC

1907.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.05	3.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.10%	24.90%

Tax rate	17.50%	21.90%
Debt/Equity ratio	3.47	3.47
Cost of debt	5.90%	19.90%

After-tax WACC	7.2%	17.6%


Selected WACC	12.4%

1907.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 1907.HK:

cost_of_equity (20.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.05) + 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.