3662.HK WACC - Weighted Average Cost of Capital

The WACC of Aoyuan Healthy Life Group Co Ltd (3662.HK) is 8.8%.

The Cost of Equity of Aoyuan Healthy Life Group Co Ltd (3662.HK) is 9.80%.

The Cost of Debt of Aoyuan Healthy Life Group Co Ltd (3662.HK) is 5.45%.

	Range	Selected
Cost of equity	7.90% - 11.70%	9.80%
Tax rate	20.40% - 22.00%	21.20%
Cost of debt	4.00% - 6.90%	5.45%
WACC	7.1% - 10.5%	8.8%

WACC

3662.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.85	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	11.70%

Tax rate	20.40%	22.00%
Debt/Equity ratio	0.22	0.22
Cost of debt	4.00%	6.90%

After-tax WACC	7.1%	10.5%


Selected WACC	8.8%

3662.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 3662.HK:

cost_of_equity (9.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.85) + 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.