581.HK WACC - Weighted Average Cost of Capital

The WACC of China Oriental Group Co Ltd (581.HK) is 9.5%.

The Cost of Equity of China Oriental Group Co Ltd (581.HK) is 7.35%.

The Cost of Debt of China Oriental Group Co Ltd (581.HK) is 11.95%.

	Range	Selected
Cost of equity	5.70% - 9.00%	7.35%
Tax rate	12.00% - 15.80%	13.90%
Cost of debt	4.00% - 19.90%	11.95%
WACC	4.0% - 15.0%	9.5%

WACC

581.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.47	0.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	9.00%

Tax rate	12.00%	15.80%
Debt/Equity ratio	3.58	3.58
Cost of debt	4.00%	19.90%

After-tax WACC	4.0%	15.0%


Selected WACC	9.5%

581.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 581.HK:

cost_of_equity (7.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.47) + 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.