3768.HK
Kunming Dianchi Water Treatment Co Ltd
Price:  
0.60 
HKD
Volume:  
81,000.00
China | Water Utilities
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3768.HK WACC - Weighted Average Cost of Capital

The WACC of Kunming Dianchi Water Treatment Co Ltd (3768.HK) is 6.4%.

The Cost of Equity of Kunming Dianchi Water Treatment Co Ltd (3768.HK) is 23.90%.
The Cost of Debt of Kunming Dianchi Water Treatment Co Ltd (3768.HK) is 5.10%.

Range Selected
Cost of equity 19.20% - 28.60% 23.90%
Tax rate 15.20% - 15.80% 15.50%
Cost of debt 4.20% - 6.00% 5.10%
WACC 5.2% - 7.6% 6.4%
WACC

3768.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 2.74 3.54
Additional risk adjustments 0.0% 0.5%
Cost of equity 19.20% 28.60%
Tax rate 15.20% 15.80%
Debt/Equity ratio 8.39 8.39
Cost of debt 4.20% 6.00%
After-tax WACC 5.2% 7.6%
Selected WACC 6.4%

3768.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 3768.HK:

cost_of_equity (23.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.74) + 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.