6189.HK WACC - Weighted Average Cost of Capital

The WACC of Guangdong Adway Construction Group Holdings Co Ltd (6189.HK) is 6.3%.

The Cost of Equity of Guangdong Adway Construction Group Holdings Co Ltd (6189.HK) is 18.50%.

The Cost of Debt of Guangdong Adway Construction Group Holdings Co Ltd (6189.HK) is 5.10%.

	Range	Selected
Cost of equity	10.30% - 26.70%	18.50%
Tax rate	7.20% - 11.70%	9.45%
Cost of debt	5.10% - 5.10%	5.10%
WACC	5.4% - 7.3%	6.3%

WACC

6189.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.25	3.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	26.70%

Tax rate	7.20%	11.70%
Debt/Equity ratio	6.98	6.98
Cost of debt	5.10%	5.10%

After-tax WACC	5.4%	7.3%


Selected WACC	6.3%

6189.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 6189.HK:

cost_of_equity (18.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.25) + 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.