220.HK WACC - Weighted Average Cost of Capital

The WACC of Uni-President China Holdings Ltd (220.HK) is 8.3%.

The Cost of Equity of Uni-President China Holdings Ltd (220.HK) is 8.25%.

The Cost of Debt of Uni-President China Holdings Ltd (220.HK) is 8.90%.

	Range	Selected
Cost of equity	7.20% - 9.30%	8.25%
Tax rate	27.90% - 29.60%	28.75%
Cost of debt	4.00% - 13.80%	8.90%
WACC	7.2% - 9.3%	8.3%

WACC

220.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.73	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	9.30%

Tax rate	27.90%	29.60%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	13.80%

After-tax WACC	7.2%	9.3%


Selected WACC	8.3%

220.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 220.HK:

cost_of_equity (8.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.73) + 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.