6805.HK WACC - Weighted Average Cost of Capital

The WACC of Kimou Environmental Holding Ltd (6805.HK) is 5.4%.

The Cost of Equity of Kimou Environmental Holding Ltd (6805.HK) is 6.40%.

The Cost of Debt of Kimou Environmental Holding Ltd (6805.HK) is 6.70%.

	Range	Selected
Cost of equity	5.50% - 7.30%	6.40%
Tax rate	29.70% - 32.40%	31.05%
Cost of debt	6.50% - 6.90%	6.70%
WACC	5.0% - 5.9%	5.4%

WACC

6805.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.44	0.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	7.30%

Tax rate	29.70%	32.40%
Debt/Equity ratio	1.16	1.16
Cost of debt	6.50%	6.90%

After-tax WACC	5.0%	5.9%


Selected WACC	5.4%

6805.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 6805.HK:

cost_of_equity (6.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.