3699.HK WACC - Weighted Average Cost of Capital

The WACC of Everbright Grand China Assets Ltd (3699.HK) is 6.7%.

The Cost of Equity of Everbright Grand China Assets Ltd (3699.HK) is 6.70%.

The Cost of Debt of Everbright Grand China Assets Ltd (3699.HK) is 5.25%.

	Range	Selected
Cost of equity	5.70% - 7.70%	6.70%
Tax rate	24.50% - 25.30%	24.90%
Cost of debt	4.00% - 6.50%	5.25%
WACC	5.7% - 7.7%	6.7%

WACC

3699.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.47	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	7.70%

Tax rate	24.50%	25.30%
Debt/Equity ratio	0	0
Cost of debt	4.00%	6.50%

After-tax WACC	5.7%	7.7%


Selected WACC	6.7%

3699.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 3699.HK:

cost_of_equity (6.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.47) + 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.