686.HK
Beijing Energy International Holding Co Ltd
Price:  
1.13 
HKD
Volume:  
119,000.00
Hong Kong | Independent Power and Renewable Electricity Producers
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686.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Energy International Holding Co Ltd (686.HK) is 7.5%.

The Cost of Equity of Beijing Energy International Holding Co Ltd (686.HK) is 14.20%.
The Cost of Debt of Beijing Energy International Holding Co Ltd (686.HK) is 9.60%.

Range Selected
Cost of equity 11.40% - 17.00% 14.20%
Tax rate 23.10% - 24.00% 23.55%
Cost of debt 4.60% - 14.60% 9.60%
WACC 3.8% - 11.3% 7.5%
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 1.43 1.87
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.40% 17.00%
Tax rate 23.10% 24.00%
Debt/Equity ratio 30.91 30.91
Cost of debt 4.60% 14.60%
After-tax WACC 3.8% 11.3%
Selected WACC 7.5%

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 (14.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.43) + 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.