291.HK WACC - Weighted Average Cost of Capital

The WACC of China Resources Beer Holdings Co Ltd (291.HK) is 8.7%.

The Cost of Equity of China Resources Beer Holdings Co Ltd (291.HK) is 8.75%.

The Cost of Debt of China Resources Beer Holdings Co Ltd (291.HK) is 8.15%.

	Range	Selected
Cost of equity	7.20% - 10.30%	8.75%
Tax rate	26.30% - 27.20%	26.75%
Cost of debt	4.00% - 12.30%	8.15%
WACC	7.1% - 10.3%	8.7%

WACC

291.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.72	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	10.30%

Tax rate	26.30%	27.20%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	12.30%

After-tax WACC	7.1%	10.3%


Selected WACC	8.7%

291.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 291.HK:

cost_of_equity (8.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.72) + 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.