346.HK WACC - Weighted Average Cost of Capital

The WACC of Yanchang Petroleum International Ltd (346.HK) is 7.8%.

The Cost of Equity of Yanchang Petroleum International Ltd (346.HK) is 12.60%.

The Cost of Debt of Yanchang Petroleum International Ltd (346.HK) is 5.65%.

	Range	Selected
Cost of equity	8.90% - 16.30%	12.60%
Tax rate	1.60% - 1.70%	1.65%
Cost of debt	4.30% - 7.00%	5.65%
WACC	5.7% - 9.8%	7.8%

WACC

346.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.02	1.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.90%	16.30%

Tax rate	1.60%	1.70%
Debt/Equity ratio	2.22	2.22
Cost of debt	4.30%	7.00%

After-tax WACC	5.7%	9.8%


Selected WACC	7.8%

346.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 346.HK:

cost_of_equity (12.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.02) + 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.