28.HK WACC - Weighted Average Cost of Capital

The WACC of Tian An China Investments Co Ltd (28.HK) is 5.6%.

The Cost of Equity of Tian An China Investments Co Ltd (28.HK) is 7.00%.

The Cost of Debt of Tian An China Investments Co Ltd (28.HK) is 6.70%.

	Range	Selected
Cost of equity	5.80% - 8.20%	7.00%
Tax rate	35.60% - 41.50%	38.55%
Cost of debt	5.30% - 8.10%	6.70%
WACC	4.6% - 6.5%	5.6%

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	0.48	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.20%

Tax rate	35.60%	41.50%
Debt/Equity ratio	0.96	0.96
Cost of debt	5.30%	8.10%

After-tax WACC	4.6%	6.5%


Selected WACC	5.6%

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 (7.00%) = 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.