2377.HK WACC - Weighted Average Cost of Capital

The WACC of China Boqi Environmental Holding Co Ltd (2377.HK) is 9.0%.

The Cost of Equity of China Boqi Environmental Holding Co Ltd (2377.HK) is 11.95%.

The Cost of Debt of China Boqi Environmental Holding Co Ltd (2377.HK) is 5.20%.

	Range	Selected
Cost of equity	9.40% - 14.50%	11.95%
Tax rate	11.30% - 11.70%	11.50%
Cost of debt	4.00% - 6.40%	5.20%
WACC	7.0% - 10.9%	9.0%

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	1.1	1.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	14.50%

Tax rate	11.30%	11.70%
Debt/Equity ratio	0.69	0.69
Cost of debt	4.00%	6.40%

After-tax WACC	7.0%	10.9%


Selected WACC	9.0%

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 (11.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.1) + 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.