1992.HK WACC - Weighted Average Cost of Capital

The WACC of Fosun Tourism Group (1992.HK) is 7.4%.

The Cost of Equity of Fosun Tourism Group (1992.HK) is 16.95%.

The Cost of Debt of Fosun Tourism Group (1992.HK) is 5.25%.

	Range	Selected
Cost of equity	14.30% - 19.60%	16.95%
Tax rate	23.90% - 30.30%	27.10%
Cost of debt	4.00% - 6.50%	5.25%
WACC	6.1% - 8.6%	7.4%

WACC

1992.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.91	2.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	19.60%

Tax rate	23.90%	30.30%
Debt/Equity ratio	2.66	2.66
Cost of debt	4.00%	6.50%

After-tax WACC	6.1%	8.6%


Selected WACC	7.4%

1992.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 1992.HK:

cost_of_equity (16.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.91) + 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.