3788.HK WACC - Weighted Average Cost of Capital

The WACC of China Hanking Holdings Ltd (3788.HK) is 10.3%.

The Cost of Equity of China Hanking Holdings Ltd (3788.HK) is 12.50%.

The Cost of Debt of China Hanking Holdings Ltd (3788.HK) is 7.10%.

	Range	Selected
Cost of equity	10.90% - 14.10%	12.50%
Tax rate	23.70% - 32.10%	27.90%
Cost of debt	4.10% - 10.10%	7.10%
WACC	8.6% - 12.0%	10.3%

WACC

3788.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.34	1.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	14.10%

Tax rate	23.70%	32.10%
Debt/Equity ratio	0.42	0.42
Cost of debt	4.10%	10.10%

After-tax WACC	8.6%	12.0%


Selected WACC	10.3%

3788.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 3788.HK:

cost_of_equity (12.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.34) + 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.