2349.HK WACC - Weighted Average Cost of Capital

The WACC of China City Infrastructure Group Ltd (2349.HK) is 7.5%.

The Cost of Equity of China City Infrastructure Group Ltd (2349.HK) is 11.10%.

The Cost of Debt of China City Infrastructure Group Ltd (2349.HK) is 6.85%.

	Range	Selected
Cost of equity	7.50% - 14.70%	11.10%
Tax rate	15.50% - 20.50%	18.00%
Cost of debt	6.70% - 7.00%	6.85%
WACC	6.3% - 8.8%	7.5%

WACC

2349.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.78	1.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	14.70%

Tax rate	15.50%	20.50%
Debt/Equity ratio	1.87	1.87
Cost of debt	6.70%	7.00%

After-tax WACC	6.3%	8.8%


Selected WACC	7.5%

2349.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 2349.HK:

cost_of_equity (11.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.78) + 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.