28.HK WACC - Weighted Average Cost of Capital

The WACC of Tian An China Investments Co Ltd (28.HK) is 5.7%.

The Cost of Equity of Tian An China Investments Co Ltd (28.HK) is 8.35%.

The Cost of Debt of Tian An China Investments Co Ltd (28.HK) is 4.45%.

	Range	Selected
Cost of equity	6.10% - 10.60%	8.35%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 4.90%	4.45%
WACC	4.5% - 6.9%	5.7%

WACC

28.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.54	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	10.60%

Tax rate	22.10%	22.30%
Debt/Equity ratio	1.21	1.21
Cost of debt	4.00%	4.90%

After-tax WACC	4.5%	6.9%


Selected WACC	5.7%

28.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 28.HK:

cost_of_equity (8.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.