3662.HK WACC - Weighted Average Cost of Capital

The WACC of Aoyuan Healthy Life Group Co Ltd (3662.HK) is 8.5%.

The Cost of Equity of Aoyuan Healthy Life Group Co Ltd (3662.HK) is 9.65%.

The Cost of Debt of Aoyuan Healthy Life Group Co Ltd (3662.HK) is 4.45%.

	Range	Selected
Cost of equity	7.70% - 11.60%	9.65%
Tax rate	20.40% - 22.00%	21.20%
Cost of debt	4.00% - 4.90%	4.45%
WACC	6.8% - 10.2%	8.5%

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	0.8	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	11.60%

Tax rate	20.40%	22.00%
Debt/Equity ratio	0.22	0.22
Cost of debt	4.00%	4.90%

After-tax WACC	6.8%	10.2%


Selected WACC	8.5%

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 (9.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.8) + 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.