6162.HK WACC - Weighted Average Cost of Capital

The WACC of China Tianrui Automotive Interiors Co Ltd (6162.HK) is 10.7%.

The Cost of Equity of China Tianrui Automotive Interiors Co Ltd (6162.HK) is 16.05%.

The Cost of Debt of China Tianrui Automotive Interiors Co Ltd (6162.HK) is 10.55%.

	Range	Selected
Cost of equity	10.00% - 22.10%	16.05%
Tax rate	13.80% - 15.70%	14.75%
Cost of debt	6.50% - 14.60%	10.55%
WACC	6.7% - 14.7%	10.7%

WACC

6162.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.19	2.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	22.10%

Tax rate	13.80%	15.70%
Debt/Equity ratio	3.22	3.22
Cost of debt	6.50%	14.60%

After-tax WACC	6.7%	14.7%


Selected WACC	10.7%

6162.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 6162.HK:

cost_of_equity (16.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.19) + 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.