1991.HK WACC - Weighted Average Cost of Capital

The WACC of Ta Yang Group Holdings Ltd (1991.HK) is 12.8%.

The Cost of Equity of Ta Yang Group Holdings Ltd (1991.HK) is 18.85%.

The Cost of Debt of Ta Yang Group Holdings Ltd (1991.HK) is 10.35%.

	Range	Selected
Cost of equity	14.40% - 23.30%	18.85%
Tax rate	1.50% - 1.80%	1.65%
Cost of debt	7.00% - 13.70%	10.35%
WACC	9.2% - 16.5%	12.8%

WACC

1991.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.94	2.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	23.30%

Tax rate	1.50%	1.80%
Debt/Equity ratio	2.26	2.26
Cost of debt	7.00%	13.70%

After-tax WACC	9.2%	16.5%


Selected WACC	12.8%

1991.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 1991.HK:

cost_of_equity (18.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.94) + 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.