680.HK WACC - Weighted Average Cost of Capital

The WACC of Nan Hai Corporation Ltd (680.HK) is 7.1%.

The Cost of Equity of Nan Hai Corporation Ltd (680.HK) is 22.05%.

The Cost of Debt of Nan Hai Corporation Ltd (680.HK) is 6.95%.

	Range	Selected
Cost of equity	11.90% - 32.20%	22.05%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	6.90% - 7.00%	6.95%
WACC	6.0% - 8.1%	7.1%

WACC

680.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.5	4.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	32.20%

Tax rate	22.10%	22.30%
Debt/Equity ratio	9.09	9.09
Cost of debt	6.90%	7.00%

After-tax WACC	6.0%	8.1%


Selected WACC	7.1%

680.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 680.HK:

cost_of_equity (22.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.5) + 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.