63.HK WACC - Weighted Average Cost of Capital

The WACC of China Asia Valley Group Ltd (63.HK) is 9.2%.

The Cost of Equity of China Asia Valley Group Ltd (63.HK) is 5.85%.

The Cost of Debt of China Asia Valley Group Ltd (63.HK) is 12.95%.

	Range	Selected
Cost of equity	5.00% - 6.70%	5.85%
Tax rate	5.10% - 8.60%	6.85%
Cost of debt	6.00% - 19.90%	12.95%
WACC	5.4% - 12.9%	9.2%

WACC

63.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.36	0.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.00%	6.70%

Tax rate	5.10%	8.60%
Debt/Equity ratio	1.2	1.2
Cost of debt	6.00%	19.90%

After-tax WACC	5.4%	12.9%


Selected WACC	9.2%

63.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 63.HK:

cost_of_equity (5.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.