25.HK WACC - Weighted Average Cost of Capital

The WACC of Chevalier International Holdings Ltd (25.HK) is 9.6%.

The Cost of Equity of Chevalier International Holdings Ltd (25.HK) is 7.25%.

The Cost of Debt of Chevalier International Holdings Ltd (25.HK) is 13.45%.

	Range	Selected
Cost of equity	6.20% - 8.30%	7.25%
Tax rate	16.40% - 24.90%	20.65%
Cost of debt	4.00% - 22.90%	13.45%
WACC	3.9% - 15.3%	9.6%

WACC

25.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.56	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.30%

Tax rate	16.40%	24.90%
Debt/Equity ratio	3.79	3.79
Cost of debt	4.00%	22.90%

After-tax WACC	3.9%	15.3%


Selected WACC	9.6%

25.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 25.HK:

cost_of_equity (7.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.