430.HK WACC - Weighted Average Cost of Capital

The WACC of Oriental Explorer Holdings Ltd (430.HK) is 7.3%.

The Cost of Equity of Oriental Explorer Holdings Ltd (430.HK) is 7.35%.

The Cost of Debt of Oriental Explorer Holdings Ltd (430.HK) is 8.10%.

	Range	Selected
Cost of equity	5.60% - 9.10%	7.35%
Tax rate	9.70% - 13.70%	11.70%
Cost of debt	8.10% - 8.10%	8.10%
WACC	6.4% - 8.1%	7.3%

WACC

430.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.46	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	9.10%

Tax rate	9.70%	13.70%
Debt/Equity ratio	0.94	0.94
Cost of debt	8.10%	8.10%

After-tax WACC	6.4%	8.1%


Selected WACC	7.3%

430.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 430.HK:

cost_of_equity (7.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.