3316.HK WACC - Weighted Average Cost of Capital

The WACC of Binjiang Service Group Co Ltd (3316.HK) is 9.6%.

The Cost of Equity of Binjiang Service Group Co Ltd (3316.HK) is 9.65%.

The Cost of Debt of Binjiang Service Group Co Ltd (3316.HK) is 6.10%.

	Range	Selected
Cost of equity	7.90% - 11.40%	9.65%
Tax rate	23.10% - 24.10%	23.60%
Cost of debt	4.00% - 8.20%	6.10%
WACC	7.9% - 11.4%	9.6%

WACC

3316.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.84	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	11.40%

Tax rate	23.10%	24.10%
Debt/Equity ratio	0	0
Cost of debt	4.00%	8.20%

After-tax WACC	7.9%	11.4%


Selected WACC	9.6%

3316.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 3316.HK:

cost_of_equity (9.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.84) + 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.