377.HK WACC - Weighted Average Cost of Capital

The WACC of China Huajun Group Ltd (377.HK) is 5.5%.

The Cost of Equity of China Huajun Group Ltd (377.HK) is 9.20%.

The Cost of Debt of China Huajun Group Ltd (377.HK) is 5.50%.

	Range	Selected
Cost of equity	3.30% - 15.10%	9.20%
Tax rate	0.90% - 1.60%	1.25%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.9% - 7.0%	5.5%

WACC

377.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	-1.1	0.6

Additional risk adjustments	7.0%	7.5%
Cost of equity	3.30%	15.10%

Tax rate	0.90%	1.60%
Debt/Equity ratio	51.68	51.68
Cost of debt	4.00%	7.00%

After-tax WACC	3.9%	7.0%


Selected WACC	5.5%

377.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 377.HK:

cost_of_equity (9.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (-1.1) + risk_adjustments (7.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.