2869.HK WACC - Weighted Average Cost of Capital

The WACC of Greentown Service Group Co Ltd (2869.HK) is 9.6%.

The Cost of Equity of Greentown Service Group Co Ltd (2869.HK) is 10.00%.

The Cost of Debt of Greentown Service Group Co Ltd (2869.HK) is 4.65%.

	Range	Selected
Cost of equity	8.60% - 11.40%	10.00%
Tax rate	26.30% - 26.60%	26.45%
Cost of debt	4.00% - 5.30%	4.65%
WACC	8.2% - 10.9%	9.6%

WACC

2869.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.96	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	11.40%

Tax rate	26.30%	26.60%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	5.30%

After-tax WACC	8.2%	10.9%


Selected WACC	9.6%

2869.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 2869.HK:

cost_of_equity (10.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.96) + 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.