385.HK WACC - Weighted Average Cost of Capital

The WACC of Chinney Alliance Group Ltd (385.HK) is 4.8%.

The Cost of Equity of Chinney Alliance Group Ltd (385.HK) is 7.45%.

The Cost of Debt of Chinney Alliance Group Ltd (385.HK) is 5.80%.

	Range	Selected
Cost of equity	6.00% - 8.90%	7.45%
Tax rate	26.50% - 27.00%	26.75%
Cost of debt	5.60% - 6.00%	5.80%
WACC	4.4% - 5.2%	4.8%

WACC

385.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.52	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	8.90%

Tax rate	26.50%	27.00%
Debt/Equity ratio	4.41	4.41
Cost of debt	5.60%	6.00%

After-tax WACC	4.4%	5.2%


Selected WACC	4.8%

385.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 385.HK:

cost_of_equity (7.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.52) + 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.