2138.HK WACC - Weighted Average Cost of Capital

The WACC of Union Medical Healthcare Ltd (2138.HK) is 11.3%.

The Cost of Equity of Union Medical Healthcare Ltd (2138.HK) is 11.05%.

The Cost of Debt of Union Medical Healthcare Ltd (2138.HK) is 13.45%.

	Range	Selected
Cost of equity	9.30% - 12.80%	11.05%
Tax rate	13.40% - 15.40%	14.40%
Cost of debt	4.00% - 22.90%	13.45%
WACC	5.5% - 17.1%	11.3%

WACC

2138.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.08	1.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	12.80%

Tax rate	13.40%	15.40%
Debt/Equity ratio	1.86	1.86
Cost of debt	4.00%	22.90%

After-tax WACC	5.5%	17.1%


Selected WACC	11.3%

2138.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 2138.HK:

cost_of_equity (11.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.08) + 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.