686.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Energy International Holding Co Ltd (686.HK) is 7.4%.

The Cost of Equity of Beijing Energy International Holding Co Ltd (686.HK) is 9.40%.

The Cost of Debt of Beijing Energy International Holding Co Ltd (686.HK) is 9.60%.

	Range	Selected
Cost of equity	7.20% - 11.60%	9.40%
Tax rate	23.10% - 24.00%	23.55%
Cost of debt	4.60% - 14.60%	9.60%
WACC	3.6% - 11.1%	7.4%

WACC

686.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.72	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	11.60%

Tax rate	23.10%	24.00%
Debt/Equity ratio	32.84	32.84
Cost of debt	4.60%	14.60%

After-tax WACC	3.6%	11.1%


Selected WACC	7.4%

686.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 686.HK:

cost_of_equity (9.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.72) + 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.