3603.HK WACC - Weighted Average Cost of Capital

The WACC of Xinji Shaxi Group Co Ltd (3603.HK) is 7.4%.

The Cost of Equity of Xinji Shaxi Group Co Ltd (3603.HK) is 63.85%.

The Cost of Debt of Xinji Shaxi Group Co Ltd (3603.HK) is 5.45%.

	Range	Selected
Cost of equity	47.10% - 80.60%	63.85%
Tax rate	19.60% - 19.70%	19.65%
Cost of debt	5.10% - 5.80%	5.45%
WACC	6.3% - 8.5%	7.4%

WACC

3603.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	7.4	10.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	47.10%	80.60%

Tax rate	19.60%	19.70%
Debt/Equity ratio	18.44	18.44
Cost of debt	5.10%	5.80%

After-tax WACC	6.3%	8.5%


Selected WACC	7.4%

3603.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 3603.HK:

cost_of_equity (63.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (7.4) + 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.