3613.HK
Beijing Tong Ren Tang Chinese Medicine Co Ltd
Price:  
8.82 
HKD
Volume:  
848,873
Hong Kong | Pharmaceuticals

3613.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Tong Ren Tang Chinese Medicine Co Ltd (3613.HK) is 6.3%.

The Cost of Equity of Beijing Tong Ren Tang Chinese Medicine Co Ltd (3613.HK) is 6.35%.
The Cost of Debt of Beijing Tong Ren Tang Chinese Medicine Co Ltd (3613.HK) is 4.25%.

RangeSelected
Cost of equity5.3% - 7.4%6.35%
Tax rate16.2% - 16.3%16.25%
Cost of debt4.0% - 4.5%4.25%
WACC5.3% - 7.4%6.3%
WACC

3613.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.410.51
Additional risk adjustments0.0%0.5%
Cost of equity5.3%7.4%
Tax rate16.2%16.3%
Debt/Equity ratio
0.020.02
Cost of debt4.0%4.5%
After-tax WACC5.3%7.4%
Selected WACC6.3%

3613.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 3613.HK:

cost_of_equity (6.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.