The WACC of Tailam Tech Construction Holdings Ltd (6193.HK) is 9.6%.
Range | Selected | |
Cost of equity | 8.3% - 11.0% | 9.65% |
Tax rate | 29.9% - 33.4% | 31.65% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 8.3% - 11.0% | 9.6% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.9 | 1.02 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.3% | 11.0% |
Tax rate | 29.9% | 33.4% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 8.3% | 11.0% |
Selected WACC | 9.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
6193.HK | Tailam Tech Construction Holdings Ltd | 0 | 0.17 | 0.17 |
002596.SZ | Hainan RuiZe New Building Material Co Ltd | 0.34 | 1.25 | 1.01 |
002671.SZ | Shandong Longquan Pipeline Engineering Co Ltd | 0.38 | 0.87 | 0.69 |
002785.SZ | Xiamen Wanli Stone Stock Co Ltd | 0.03 | 0.91 | 0.89 |
300135.SZ | Jiangsu Baoli International Investment Co Ltd | 0.17 | 1.17 | 1.05 |
300234.SZ | Zhejiang Kaier New Materials Co Ltd | 0.01 | 1.25 | 1.25 |
600539.SS | Taiyuan Lionhead Cement Co Ltd | 0.02 | 1.72 | 1.69 |
600802.SS | Fujian Cement Inc | 0.73 | 1.21 | 0.8 |
600883.SS | Yunnan Bowin Technology Industry Co Ltd | 0 | 1.05 | 1.05 |
695.HK | Dongwu Cement International Ltd | 0.23 | 0.29 | 0.25 |
Low | High | |
Unlevered beta | 0.86 | 1.02 |
Relevered beta | 0.85 | 1.03 |
Adjusted relevered beta | 0.9 | 1.02 |
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 6193.HK:
cost_of_equity (9.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.9) + 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.