389.HK
China Tontine Wines Group Ltd
Price:  
0.43 
HKD
Volume:  
1,753,200
China | Beverages

389.HK WACC - Weighted Average Cost of Capital

The WACC of China Tontine Wines Group Ltd (389.HK) is 8.0%.

The Cost of Equity of China Tontine Wines Group Ltd (389.HK) is 12%.
The Cost of Debt of China Tontine Wines Group Ltd (389.HK) is 5%.

RangeSelected
Cost of equity10.1% - 13.9%12%
Tax rate22.1% - 22.3%22.2%
Cost of debt5.0% - 5.0%5%
WACC7.0% - 8.9%8.0%
WACC

389.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta1.221.44
Additional risk adjustments0.0%0.5%
Cost of equity10.1%13.9%
Tax rate22.1%22.3%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC7.0%8.9%
Selected WACC8.0%

389.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 389.HK:

cost_of_equity (12.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.22) + 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.