2236.HK WACC - Weighted Average Cost of Capital

The WACC of Wison Engineering Services Co Ltd (2236.HK) is 8.5%.

The Cost of Equity of Wison Engineering Services Co Ltd (2236.HK) is 12.15%.

The Cost of Debt of Wison Engineering Services Co Ltd (2236.HK) is 5.15%.

	Range	Selected
Cost of equity	9.80% - 14.50%	12.15%
Tax rate	3.40% - 5.70%	4.55%
Cost of debt	4.60% - 5.70%	5.15%
WACC	7.1% - 9.9%	8.5%

WACC

2236.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.16	1.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	14.50%

Tax rate	3.40%	5.70%
Debt/Equity ratio	1.02	1.02
Cost of debt	4.60%	5.70%

After-tax WACC	7.1%	9.9%


Selected WACC	8.5%

2236.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 2236.HK:

cost_of_equity (12.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.16) + 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.