674.HK WACC - Weighted Average Cost of Capital

The WACC of China Tangshang Holdings Ltd (674.HK) is 4.6%.

The Cost of Equity of China Tangshang Holdings Ltd (674.HK) is 5.65%.

The Cost of Debt of China Tangshang Holdings Ltd (674.HK) is 6.20%.

	Range	Selected
Cost of equity	4.70% - 6.60%	5.65%
Tax rate	35.20% - 36.00%	35.60%
Cost of debt	5.40% - 7.00%	6.20%
WACC	3.9% - 5.3%	4.6%

WACC

674.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.31	0.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.70%	6.60%

Tax rate	35.20%	36.00%
Debt/Equity ratio	1.64	1.64
Cost of debt	5.40%	7.00%

After-tax WACC	3.9%	5.3%


Selected WACC	4.6%

674.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 674.HK:

cost_of_equity (5.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.31) + 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.