6199.HK WACC - Weighted Average Cost of Capital

The WACC of Bank of Guizhou Co Ltd (6199.HK) is 5.1%.

The Cost of Equity of Bank of Guizhou Co Ltd (6199.HK) is 11.45%.

The Cost of Debt of Bank of Guizhou Co Ltd (6199.HK) is 5.00%.

	Range	Selected
Cost of equity	9.50% - 13.40%	11.45%
Tax rate	10.40% - 11.20%	10.80%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.0% - 5.3%	5.1%

WACC

6199.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.11	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	13.40%

Tax rate	10.40%	11.20%
Debt/Equity ratio	9.46	9.46
Cost of debt	5.00%	5.00%

After-tax WACC	5.0%	5.3%


Selected WACC	5.1%

6199.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 6199.HK:

cost_of_equity (11.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.11) + 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.