43.HK WACC - Weighted Average Cost of Capital

The WACC of C.P. Pokphand Co. Ltd (43.HK) is 7.3%.

The Cost of Equity of C.P. Pokphand Co. Ltd (43.HK) is 8.80%.

The Cost of Debt of C.P. Pokphand Co. Ltd (43.HK) is 5.20%.

	Range	Selected
Cost of equity	7.10% - 10.50%	8.80%
Tax rate	21.20% - 23.70%	22.45%
Cost of debt	4.20% - 6.20%	5.20%
WACC	5.9% - 8.7%	7.3%

WACC

43.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.77	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	10.50%

Tax rate	21.20%	23.70%
Debt/Equity ratio	0.46	0.46
Cost of debt	4.20%	6.20%

After-tax WACC	5.9%	8.7%


Selected WACC	7.3%

43.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 43.HK:

cost_of_equity (8.80%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.77) + 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.