2337.HK WACC - Weighted Average Cost of Capital

The WACC of United Strength Power Holdings Ltd (2337.HK) is 7.5%.

The Cost of Equity of United Strength Power Holdings Ltd (2337.HK) is 12.40%.

The Cost of Debt of United Strength Power Holdings Ltd (2337.HK) is 4.40%.

	Range	Selected
Cost of equity	10.60% - 14.20%	12.40%
Tax rate	27.60% - 29.70%	28.65%
Cost of debt	4.30% - 4.50%	4.40%
WACC	6.6% - 8.4%	7.5%

WACC

2337.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.29	1.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	14.20%

Tax rate	27.60%	29.70%
Debt/Equity ratio	1.13	1.13
Cost of debt	4.30%	4.50%

After-tax WACC	6.6%	8.4%


Selected WACC	7.5%

2337.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 2337.HK:

cost_of_equity (12.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.29) + 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.