370.HK WACC - Weighted Average Cost of Capital

The WACC of China Best Group Holding Ltd (370.HK) is 5.8%.

The Cost of Equity of China Best Group Holding Ltd (370.HK) is 5.90%.

The Cost of Debt of China Best Group Holding Ltd (370.HK) is 7.60%.

	Range	Selected
Cost of equity	5.10% - 6.70%	5.90%
Tax rate	16.50% - 44.90%	30.70%
Cost of debt	7.00% - 8.20%	7.60%
WACC	5.1% - 6.5%	5.8%

WACC

370.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.37	0.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	6.70%

Tax rate	16.50%	44.90%
Debt/Equity ratio	0.1	0.1
Cost of debt	7.00%	8.20%

After-tax WACC	5.1%	6.5%


Selected WACC	5.8%

370.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 370.HK:

cost_of_equity (5.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.