3318.HK WACC - Weighted Average Cost of Capital

The WACC of China Boton Group Co Ltd (3318.HK) is 5.4%.

The Cost of Equity of China Boton Group Co Ltd (3318.HK) is 7.20%.

The Cost of Debt of China Boton Group Co Ltd (3318.HK) is 4.70%.

	Range	Selected
Cost of equity	6.20% - 8.20%	7.20%
Tax rate	25.20% - 25.70%	25.45%
Cost of debt	4.30% - 5.10%	4.70%
WACC	4.7% - 6.0%	5.4%

WACC

3318.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.56	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.20%

Tax rate	25.20%	25.70%
Debt/Equity ratio	0.99	0.99
Cost of debt	4.30%	5.10%

After-tax WACC	4.7%	6.0%


Selected WACC	5.4%

3318.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 3318.HK:

cost_of_equity (7.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.