31.HK WACC - Weighted Average Cost of Capital

The WACC of China Aerospace International Holdings Ltd (31.HK) is 6.7%.

The Cost of Equity of China Aerospace International Holdings Ltd (31.HK) is 11.30%.

The Cost of Debt of China Aerospace International Holdings Ltd (31.HK) is 4.35%.

	Range	Selected
Cost of equity	7.60% - 15.00%	11.30%
Tax rate	20.30% - 33.80%	27.05%
Cost of debt	4.10% - 4.60%	4.35%
WACC	5.1% - 8.2%	6.7%

WACC

31.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.79	1.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	15.00%

Tax rate	20.30%	33.80%
Debt/Equity ratio	1.31	1.31
Cost of debt	4.10%	4.60%

After-tax WACC	5.1%	8.2%


Selected WACC	6.7%

31.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 31.HK:

cost_of_equity (11.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.79) + 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.