65.HK WACC - Weighted Average Cost of Capital

The WACC of Grand Ocean Advanced Resources Co Ltd (65.HK) is 6.4%.

The Cost of Equity of Grand Ocean Advanced Resources Co Ltd (65.HK) is 6.45%.

The Cost of Debt of Grand Ocean Advanced Resources Co Ltd (65.HK) is 7.00%.

	Range	Selected
Cost of equity	5.20% - 7.70%	6.45%
Tax rate	2.50% - 4.20%	3.35%
Cost of debt	7.00% - 7.00%	7.00%
WACC	5.2% - 7.7%	6.4%

WACC

65.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	7.70%

Tax rate	2.50%	4.20%
Debt/Equity ratio	0	0
Cost of debt	7.00%	7.00%

After-tax WACC	5.2%	7.7%


Selected WACC	6.4%

65.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 65.HK:

cost_of_equity (6.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.