603.HK
China Oil and Gas Group Ltd
Price:  
0.14 
HKD
Volume:  
1,669,360.00
Hong Kong | Gas Utilities
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603.HK WACC - Weighted Average Cost of Capital

The WACC of China Oil and Gas Group Ltd (603.HK) is 5.6%.

The Cost of Equity of China Oil and Gas Group Ltd (603.HK) is 25.20%.
The Cost of Debt of China Oil and Gas Group Ltd (603.HK) is 5.05%.

Range Selected
Cost of equity 20.00% - 30.40% 25.20%
Tax rate 24.40% - 27.30% 25.85%
Cost of debt 5.00% - 5.10% 5.05%
WACC 5.2% - 6.0% 5.6%
WACC

603.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 2.86 3.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 20.00% 30.40%
Tax rate 24.40% 27.30%
Debt/Equity ratio 10.49 10.49
Cost of debt 5.00% 5.10%
After-tax WACC 5.2% 6.0%
Selected WACC 5.6%

603.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 603.HK:

cost_of_equity (25.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.86) + 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.