6839.HK WACC - Weighted Average Cost of Capital

The WACC of Yunnan Water Investment Company Ltd (6839.HK) is 4.8%.

The Cost of Equity of Yunnan Water Investment Company Ltd (6839.HK) is 28.40%.

The Cost of Debt of Yunnan Water Investment Company Ltd (6839.HK) is 5.50%.

	Range	Selected
Cost of equity	18.80% - 38.00%	28.40%
Tax rate	11.70% - 19.60%	15.65%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.7% - 6.0%	4.8%

WACC

6839.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.66	4.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.80%	38.00%

Tax rate	11.70%	19.60%
Debt/Equity ratio	90.43	90.43
Cost of debt	4.00%	7.00%

After-tax WACC	3.7%	6.0%


Selected WACC	4.8%

6839.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 6839.HK:

cost_of_equity (28.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.66) + 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.