656.HK WACC - Weighted Average Cost of Capital

The WACC of Fosun International Ltd (656.HK) is 5.7%.

The Cost of Equity of Fosun International Ltd (656.HK) is 22.15%.

The Cost of Debt of Fosun International Ltd (656.HK) is 5.90%.

	Range	Selected
Cost of equity	18.10% - 26.20%	22.15%
Tax rate	33.60% - 49.60%	41.60%
Cost of debt	4.80% - 7.00%	5.90%
WACC	5.1% - 6.4%	5.7%

WACC

656.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.54	3.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.10%	26.20%

Tax rate	33.60%	49.60%
Debt/Equity ratio	6.92	6.92
Cost of debt	4.80%	7.00%

After-tax WACC	5.1%	6.4%


Selected WACC	5.7%

656.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 656.HK:

cost_of_equity (22.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.54) + 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.