220.HK WACC - Weighted Average Cost of Capital

The WACC of Uni-President China Holdings Ltd (220.HK) is 7.5%.

The Cost of Equity of Uni-President China Holdings Ltd (220.HK) is 7.60%.

The Cost of Debt of Uni-President China Holdings Ltd (220.HK) is 7.65%.

	Range	Selected
Cost of equity	6.50% - 8.70%	7.60%
Tax rate	25.60% - 27.10%	26.35%
Cost of debt	4.00% - 11.30%	7.65%
WACC	6.4% - 8.7%	7.5%

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	0.6	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	8.70%

Tax rate	25.60%	27.10%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	11.30%

After-tax WACC	6.4%	8.7%


Selected WACC	7.5%

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 (7.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.6) + 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.