2393.HK WACC - Weighted Average Cost of Capital

The WACC of Yestar Healthcare Holdings Co Ltd (2393.HK) is 9.3%.

The Cost of Equity of Yestar Healthcare Holdings Co Ltd (2393.HK) is 20.15%.

The Cost of Debt of Yestar Healthcare Holdings Co Ltd (2393.HK) is 6.05%.

	Range	Selected
Cost of equity	16.90% - 23.40%	20.15%
Tax rate	5.20% - 35.60%	20.40%
Cost of debt	4.00% - 8.10%	6.05%
WACC	7.8% - 10.9%	9.3%

WACC

2393.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.34	2.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.90%	23.40%

Tax rate	5.20%	35.60%
Debt/Equity ratio	2.23	2.23
Cost of debt	4.00%	8.10%

After-tax WACC	7.8%	10.9%


Selected WACC	9.3%

2393.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 2393.HK:

cost_of_equity (20.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.34) + 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.