1966.HK WACC - Weighted Average Cost of Capital

The WACC of China SCE Group Holdings Ltd (1966.HK) is 4.4%.

The Cost of Equity of China SCE Group Holdings Ltd (1966.HK) is 106.15%.

The Cost of Debt of China SCE Group Holdings Ltd (1966.HK) is 5.50%.

	Range	Selected
Cost of equity	70.00% - 142.30%	106.15%
Tax rate	22.00% - 31.00%	26.50%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.4% - 5.4%	4.4%

WACC

1966.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	11.23	19.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	70.00%	142.30%

Tax rate	22.00%	31.00%
Debt/Equity ratio	224.7	224.7
Cost of debt	4.00%	7.00%

After-tax WACC	3.4%	5.4%


Selected WACC	4.4%

1966.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 1966.HK:

cost_of_equity (106.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (11.23) + 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.