6166.HK WACC - Weighted Average Cost of Capital

The WACC of China Vast Industrial Urban Development Company Ltd (6166.HK) is 8.5%.

The Cost of Equity of China Vast Industrial Urban Development Company Ltd (6166.HK) is 5.80%.

The Cost of Debt of China Vast Industrial Urban Development Company Ltd (6166.HK) is 15.60%.

	Range	Selected
Cost of equity	5.10% - 6.50%	5.80%
Tax rate	33.30% - 36.20%	34.75%
Cost of debt	8.30% - 22.90%	15.60%
WACC	5.4% - 11.6%	8.5%

WACC

6166.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.37	0.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	6.50%

Tax rate	33.30%	36.20%
Debt/Equity ratio	1.7	1.7
Cost of debt	8.30%	22.90%

After-tax WACC	5.4%	11.6%


Selected WACC	8.5%

6166.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 6166.HK:

cost_of_equity (5.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.