557.HK WACC - Weighted Average Cost of Capital
The WACC of China Tian Yuan Healthcare Group Ltd (557.HK) is 7.2%.
| Range | Selected | |
| Cost of equity | 5.4% - 6.7% | 6.05% |
| Tax rate | 0.3% - 2.8% | 1.55% |
| Cost of debt | 7.0% - 24.0% | 15.5% |
| WACC | 5.6% - 8.8% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.34 | 0.34 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.4% | 6.7% |
| Tax rate | 0.3% | 2.8% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 7.0% | 24.0% |
| After-tax WACC | 5.6% | 8.8% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 557.HK | China Tian Yuan Healthcare Group Ltd | 0.14 | -0.73 | -0.64 |
| 1355.HK | Legend Strategy International Holdings Group Company Ltd | 1.84 | -0.28 | -0.1 |
| 181.HK | Fujian Holdings Ltd | 0.01 | 0.69 | 0.68 |
| 22.HK | Mexan Ltd | 0.5 | 1.8 | 1.2 |
| 292.HK | Asia Standard Hotel Group Ltd | 37.96 | 0.34 | 0.01 |
| 355.HK | Century City International Holdings Ltd | 172.76 | 0.77 | 0 |
| 37.HK | Far East Hotels and Entertainment Ltd | 0.05 | 0.48 | 0.46 |
| 6882.HK | EGL Holdings Co Ltd | 1.37 | 0.04 | 0.02 |
| 78.HK | Regal Hotels International Holdings Ltd | 37.34 | 0.49 | 0.01 |
| 8237.HK | Link Holdings Ltd | 13.57 | 0.18 | 0.01 |
| Low | High | |
| Unlevered beta | 0.01 | 0.01 |
| Relevered beta | 0.01 | 0.01 |
| Adjusted relevered beta | 0.34 | 0.34 |
557.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 557.HK:
cost_of_equity (6.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.34) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.