2377.HK WACC - Weighted Average Cost of Capital

The WACC of China Boqi Environmental Holding Co Ltd (2377.HK) is 8.4%.

The Cost of Equity of China Boqi Environmental Holding Co Ltd (2377.HK) is 11.75%.

The Cost of Debt of China Boqi Environmental Holding Co Ltd (2377.HK) is 4.65%.

	Range	Selected
Cost of equity	9.20% - 14.30%	11.75%
Tax rate	11.30% - 11.70%	11.50%
Cost of debt	4.00% - 5.30%	4.65%
WACC	6.7% - 10.1%	8.4%

WACC

2377.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.06	1.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	14.30%

Tax rate	11.30%	11.70%
Debt/Equity ratio	0.78	0.78
Cost of debt	4.00%	5.30%

After-tax WACC	6.7%	10.1%


Selected WACC	8.4%

2377.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 2377.HK:

cost_of_equity (11.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.06) + 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.