513.HK WACC - Weighted Average Cost of Capital

The WACC of Continental Holdings Ltd (513.HK) is 4.2%.

The Cost of Equity of Continental Holdings Ltd (513.HK) is 9.75%.

The Cost of Debt of Continental Holdings Ltd (513.HK) is 5.50%.

	Range	Selected
Cost of equity	6.00% - 13.50%	9.75%
Tax rate	23.30% - 39.90%	31.60%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.3% - 5.0%	4.2%

WACC

513.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.53	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	13.50%

Tax rate	23.30%	39.90%
Debt/Equity ratio	10.42	10.42
Cost of debt	4.00%	7.00%

After-tax WACC	3.3%	5.0%


Selected WACC	4.2%

513.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 513.HK:

cost_of_equity (9.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.53) + 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.