521.HK WACC - Weighted Average Cost of Capital

The WACC of CWT International Ltd (521.HK) is 4.1%.

The Cost of Equity of CWT International Ltd (521.HK) is 5.85%.

The Cost of Debt of CWT International Ltd (521.HK) is 5.00%.

	Range	Selected
Cost of equity	5.00% - 6.70%	5.85%
Tax rate	32.80% - 36.40%	34.60%
Cost of debt	4.00% - 6.00%	5.00%
WACC	3.4% - 4.7%	4.1%

WACC

521.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.36	0.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.00%	6.70%

Tax rate	32.80%	36.40%
Debt/Equity ratio	2.27	2.27
Cost of debt	4.00%	6.00%

After-tax WACC	3.4%	4.7%


Selected WACC	4.1%

521.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 521.HK:

cost_of_equity (5.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.