2799.HK WACC - Weighted Average Cost of Capital

The WACC of China Huarong Asset Management Co Ltd (2799.HK) is 8.5%.

The Cost of Equity of China Huarong Asset Management Co Ltd (2799.HK) is 20.20%.

The Cost of Debt of China Huarong Asset Management Co Ltd (2799.HK) is 9.30%.

	Range	Selected
Cost of equity	11.10% - 29.30%	20.20%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 14.60%	9.30%
WACC	3.9% - 13.1%	8.5%

WACC

2799.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.37	3.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	29.30%

Tax rate	22.10%	22.30%
Debt/Equity ratio	9.52	9.52
Cost of debt	4.00%	14.60%

After-tax WACC	3.9%	13.1%


Selected WACC	8.5%

2799.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 2799.HK:

cost_of_equity (20.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.37) + 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.