672.HK WACC - Weighted Average Cost of Capital

The WACC of Zhong An Group Ltd (672.HK) is 6.8%.

The Cost of Equity of Zhong An Group Ltd (672.HK) is 29.80%.

The Cost of Debt of Zhong An Group Ltd (672.HK) is 6.15%.

	Range	Selected
Cost of equity	22.60% - 37.00%	29.80%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	5.80% - 6.50%	6.15%
WACC	6.0% - 7.6%	6.8%

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	3.3	4.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	22.60%	37.00%

Tax rate	22.10%	22.30%
Debt/Equity ratio	11.49	11.49
Cost of debt	5.80%	6.50%

After-tax WACC	6.0%	7.6%


Selected WACC	6.8%

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 (29.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (3.3) + 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.