672.HK WACC - Weighted Average Cost of Capital

The WACC of Zhong An Group Ltd (672.HK) is 5.5%.

The Cost of Equity of Zhong An Group Ltd (672.HK) is 25.50%.

The Cost of Debt of Zhong An Group Ltd (672.HK) is 6.00%.

	Range	Selected
Cost of equity	17.90% - 33.10%	25.50%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	5.00% - 7.00%	6.00%
WACC	4.5% - 6.6%	5.5%

WACC

672.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.51	4.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.90%	33.10%

Tax rate	22.10%	22.30%
Debt/Equity ratio	22.86	22.86
Cost of debt	5.00%	7.00%

After-tax WACC	4.5%	6.6%


Selected WACC	5.5%

672.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 672.HK:

cost_of_equity (25.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.51) + 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.