2355.HK WACC - Weighted Average Cost of Capital

The WACC of Baoye Group Co Ltd (2355.HK) is 6.7%.

The Cost of Equity of Baoye Group Co Ltd (2355.HK) is 13.00%.

The Cost of Debt of Baoye Group Co Ltd (2355.HK) is 4.85%.

	Range	Selected
Cost of equity	11.00% - 15.00%	13.00%
Tax rate	36.90% - 39.90%	38.40%
Cost of debt	4.00% - 5.70%	4.85%
WACC	5.7% - 7.7%	6.7%

WACC

2355.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.36	1.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	15.00%

Tax rate	36.90%	39.90%
Debt/Equity ratio	1.7	1.7
Cost of debt	4.00%	5.70%

After-tax WACC	5.7%	7.7%


Selected WACC	6.7%

2355.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 2355.HK:

cost_of_equity (13.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.36) + 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.