6138.HK WACC - Weighted Average Cost of Capital

The WACC of Harbin Bank Co Ltd (6138.HK) is 4.3%.

The Cost of Equity of Harbin Bank Co Ltd (6138.HK) is 18.40%.

The Cost of Debt of Harbin Bank Co Ltd (6138.HK) is 5.00%.

	Range	Selected
Cost of equity	11.00% - 25.80%	18.40%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	4.1% - 4.6%	4.3%

WACC

6138.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.37	3.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	25.80%

Tax rate	22.10%	22.30%
Debt/Equity ratio	31.19	31.19
Cost of debt	5.00%	5.00%

After-tax WACC	4.1%	4.6%


Selected WACC	4.3%

6138.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 6138.HK:

cost_of_equity (18.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.37) + 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.