25.HK WACC - Weighted Average Cost of Capital

The WACC of Chevalier International Holdings Ltd (25.HK) is 5.2%.

The Cost of Equity of Chevalier International Holdings Ltd (25.HK) is 10.20%.

The Cost of Debt of Chevalier International Holdings Ltd (25.HK) is 5.20%.

	Range	Selected
Cost of equity	5.80% - 14.60%	10.20%
Tax rate	32.40% - 35.90%	34.15%
Cost of debt	4.40% - 6.00%	5.20%
WACC	3.7% - 6.7%	5.2%

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	0.48	1.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	14.60%

Tax rate	32.40%	35.90%
Debt/Equity ratio	2.76	2.76
Cost of debt	4.40%	6.00%

After-tax WACC	3.7%	6.7%


Selected WACC	5.2%

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 (10.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.48) + 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.