2358.HK WACC - Weighted Average Cost of Capital

The WACC of Jiu Rong Holdings Ltd (2358.HK) is 3.9%.

The Cost of Equity of Jiu Rong Holdings Ltd (2358.HK) is 10.35%.

The Cost of Debt of Jiu Rong Holdings Ltd (2358.HK) is 5.55%.

	Range	Selected
Cost of equity	8.00% - 12.70%	10.35%
Tax rate	27.00% - 42.20%	34.60%
Cost of debt	4.10% - 7.00%	5.55%
WACC	3.2% - 4.5%	3.9%

WACC

2358.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.86	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	12.70%

Tax rate	27.00%	42.20%
Debt/Equity ratio	17.67	17.67
Cost of debt	4.10%	7.00%

After-tax WACC	3.2%	4.5%


Selected WACC	3.9%

2358.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 2358.HK:

cost_of_equity (10.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.86) + 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.