554.HK WACC - Weighted Average Cost of Capital

The WACC of Hans Energy Co Ltd (554.HK) is 6.7%.

The Cost of Equity of Hans Energy Co Ltd (554.HK) is 11.10%.

The Cost of Debt of Hans Energy Co Ltd (554.HK) is 6.85%.

	Range	Selected
Cost of equity	9.00% - 13.20%	11.10%
Tax rate	9.00% - 28.40%	18.70%
Cost of debt	6.70% - 7.00%	6.85%
WACC	6.7% - 6.8%	6.7%

WACC

554.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.03	1.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	13.20%

Tax rate	9.00%	28.40%
Debt/Equity ratio	3.67	3.67
Cost of debt	6.70%	7.00%

After-tax WACC	6.7%	6.8%


Selected WACC	6.7%

554.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 554.HK:

cost_of_equity (11.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.03) + 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.