332.HK WACC - Weighted Average Cost of Capital

The WACC of Yuan Heng Gas Holdings Ltd (332.HK) is 6.1%.

The Cost of Equity of Yuan Heng Gas Holdings Ltd (332.HK) is 23.25%.

The Cost of Debt of Yuan Heng Gas Holdings Ltd (332.HK) is 6.50%.

	Range	Selected
Cost of equity	16.90% - 29.60%	23.25%
Tax rate	28.70% - 34.30%	31.50%
Cost of debt	6.00% - 7.00%	6.50%
WACC	5.4% - 6.8%	6.1%

WACC

332.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.34	3.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.90%	29.60%

Tax rate	28.70%	34.30%
Debt/Equity ratio	10.39	10.39
Cost of debt	6.00%	7.00%

After-tax WACC	5.4%	6.8%


Selected WACC	6.1%

332.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 332.HK:

cost_of_equity (23.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.34) + 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.