3316.HK WACC - Weighted Average Cost of Capital

The WACC of Binjiang Service Group Co Ltd (3316.HK) is 11.1%.

The Cost of Equity of Binjiang Service Group Co Ltd (3316.HK) is 11.15%.

The Cost of Debt of Binjiang Service Group Co Ltd (3316.HK) is 5.25%.

	Range	Selected
Cost of equity	9.80% - 12.50%	11.15%
Tax rate	23.10% - 24.10%	23.60%
Cost of debt	4.00% - 6.50%	5.25%
WACC	9.8% - 12.5%	11.1%

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	1.15	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	12.50%

Tax rate	23.10%	24.10%
Debt/Equity ratio	0	0
Cost of debt	4.00%	6.50%

After-tax WACC	9.8%	12.5%


Selected WACC	11.1%

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 (11.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.15) + 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.