2789.HK WACC - Weighted Average Cost of Capital

The WACC of Yuanda China Holdings Ltd (2789.HK) is 6.0%.

The Cost of Equity of Yuanda China Holdings Ltd (2789.HK) is 12.15%.

The Cost of Debt of Yuanda China Holdings Ltd (2789.HK) is 5.95%.

	Range	Selected
Cost of equity	10.50% - 13.80%	12.15%
Tax rate	23.30% - 29.90%	26.60%
Cost of debt	4.90% - 7.00%	5.95%
WACC	5.2% - 6.8%	6.0%

WACC

2789.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.28	1.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	13.80%

Tax rate	23.30%	29.90%
Debt/Equity ratio	3.65	3.65
Cost of debt	4.90%	7.00%

After-tax WACC	5.2%	6.8%


Selected WACC	6.0%

2789.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 2789.HK:

cost_of_equity (12.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.28) + 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.