1907.HK WACC - Weighted Average Cost of Capital

The WACC of China Risun Group Ltd (1907.HK) is 10.3%.

The Cost of Equity of China Risun Group Ltd (1907.HK) is 13.75%.

The Cost of Debt of China Risun Group Ltd (1907.HK) is 10.90%.

	Range	Selected
Cost of equity	11.40% - 16.10%	13.75%
Tax rate	15.50% - 16.90%	16.20%
Cost of debt	7.20% - 14.60%	10.90%
WACC	7.4% - 13.1%	10.3%

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	1.42	1.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	16.10%

Tax rate	15.50%	16.90%
Debt/Equity ratio	3.06	3.06
Cost of debt	7.20%	14.60%

After-tax WACC	7.4%	13.1%


Selected WACC	10.3%

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 (13.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.42) + 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.