The WACC of Vedan International Holdings Ltd (2317.HK) is 6.7%.
Range | Selected | |
Cost of equity | 6.3% - 8.8% | 7.55% |
Tax rate | 24.9% - 25.8% | 25.35% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.7% - 7.8% | 6.7% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.58 | 0.71 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.3% | 8.8% |
Tax rate | 24.9% | 25.8% |
Debt/Equity ratio | 0.24 | 0.24 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.7% | 7.8% |
Selected WACC | 6.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2317.HK | Vedan International Holdings Ltd | 0.24 | 0.33 | 0.28 |
002567.SZ | Tangrenshen Group Co Ltd | 1.09 | 1.22 | 0.67 |
002726.SZ | Shandong Longda Meat Foodstuff Co Ltd | 0.52 | 0.91 | 0.65 |
004370.KS | Nongshim Co Ltd | 0.08 | 0.54 | 0.51 |
1112.HK | Health and Happiness (H&H) International Holdings Ltd | 1.35 | 0.92 | 0.46 |
1475.HK | Nissin Foods Co Ltd | 0 | 0.17 | 0.17 |
2319.HK | China Mengniu Dairy Co Ltd | 0.6 | 1.26 | 0.87 |
345.HK | Vitasoy International Holdings Ltd | 0.06 | 0.31 | 0.3 |
3838.HK | China Starch Holdings Ltd | 1.41 | 0.69 | 0.34 |
411.HK | Lam Soon Hong Kong Ltd | 0 | 0.18 | 0.18 |
Low | High | |
Unlevered beta | 0.32 | 0.48 |
Relevered beta | 0.37 | 0.57 |
Adjusted relevered beta | 0.58 | 0.71 |
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 2317.HK:
cost_of_equity (7.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.58) + 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.