2236.HK WACC - Weighted Average Cost of Capital

The WACC of Wison Engineering Services Co Ltd (2236.HK) is 8.7%.

The Cost of Equity of Wison Engineering Services Co Ltd (2236.HK) is 11.45%.

The Cost of Debt of Wison Engineering Services Co Ltd (2236.HK) is 5.40%.

	Range	Selected
Cost of equity	9.10% - 13.80%	11.45%
Tax rate	3.40% - 5.70%	4.55%
Cost of debt	5.10% - 5.70%	5.40%
WACC	7.3% - 10.1%	8.7%

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	1.04	1.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	13.80%

Tax rate	3.40%	5.70%
Debt/Equity ratio	0.76	0.76
Cost of debt	5.10%	5.70%

After-tax WACC	7.3%	10.1%


Selected WACC	8.7%

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 (11.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.04) + 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.