2211.HK WACC - Weighted Average Cost of Capital

The WACC of Universal Health International Group Holding Ltd (2211.HK) is 6.3%.

The Cost of Equity of Universal Health International Group Holding Ltd (2211.HK) is 7.10%.

The Cost of Debt of Universal Health International Group Holding Ltd (2211.HK) is 5.65%.

	Range	Selected
Cost of equity	6.10% - 8.10%	7.10%
Tax rate	0.60% - 2.60%	1.60%
Cost of debt	4.10% - 7.20%	5.65%
WACC	5.0% - 7.5%	6.3%

WACC

2211.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.54	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.10%

Tax rate	0.60%	2.60%
Debt/Equity ratio	1.15	1.15
Cost of debt	4.10%	7.20%

After-tax WACC	5.0%	7.5%


Selected WACC	6.3%

2211.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 2211.HK:

cost_of_equity (7.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.