3983.HK WACC - Weighted Average Cost of Capital

The WACC of China BlueChemical Ltd (3983.HK) is 9.7%.

The Cost of Equity of China BlueChemical Ltd (3983.HK) is 11.25%.

The Cost of Debt of China BlueChemical Ltd (3983.HK) is 4.25%.

	Range	Selected
Cost of equity	9.70% - 12.80%	11.25%
Tax rate	19.80% - 21.10%	20.45%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.5% - 11.0%	9.7%

WACC

3983.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.15	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	12.80%

Tax rate	19.80%	21.10%
Debt/Equity ratio	0.24	0.24
Cost of debt	4.00%	4.50%

After-tax WACC	8.5%	11.0%


Selected WACC	9.7%

3983.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 3983.HK:

cost_of_equity (11.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.15) + 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.