1959.HK WACC - Weighted Average Cost of Capital

The WACC of Centenary United Holdings Ltd (1959.HK) is 8.0%.

The Cost of Equity of Centenary United Holdings Ltd (1959.HK) is 11.95%.

The Cost of Debt of Centenary United Holdings Ltd (1959.HK) is 5.50%.

	Range	Selected
Cost of equity	10.30% - 13.60%	11.95%
Tax rate	19.10% - 31.40%	25.25%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.8% - 9.3%	8.0%

WACC

1959.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.24	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	13.60%

Tax rate	19.10%	31.40%
Debt/Equity ratio	0.97	0.97
Cost of debt	4.00%	7.00%

After-tax WACC	6.8%	9.3%


Selected WACC	8.0%

1959.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 1959.HK:

cost_of_equity (11.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.24) + 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.