686.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Energy International Holding Co Ltd (686.HK) is 6.4%.

The Cost of Equity of Beijing Energy International Holding Co Ltd (686.HK) is 21.80%.

The Cost of Debt of Beijing Energy International Holding Co Ltd (686.HK) is 7.70%.

	Range	Selected
Cost of equity	13.40% - 30.20%	21.80%
Tax rate	23.10% - 24.00%	23.55%
Cost of debt	4.00% - 11.40%	7.70%
WACC	3.4% - 9.4%	6.4%

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	1.76	3.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	30.20%

Tax rate	23.10%	24.00%
Debt/Equity ratio	28.08	28.08
Cost of debt	4.00%	11.40%

After-tax WACC	3.4%	9.4%


Selected WACC	6.4%

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 (21.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.76) + 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.