6890.HK WACC - Weighted Average Cost of Capital

The WACC of Kangli International Holdings Ltd (6890.HK) is 8.8%.

The Cost of Equity of Kangli International Holdings Ltd (6890.HK) is 17.95%.

The Cost of Debt of Kangli International Holdings Ltd (6890.HK) is 4.30%.

	Range	Selected
Cost of equity	14.80% - 21.10%	17.95%
Tax rate	14.50% - 19.60%	17.05%
Cost of debt	4.10% - 4.50%	4.30%
WACC	7.6% - 9.9%	8.8%

WACC

6890.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	2.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.80%	21.10%

Tax rate	14.50%	19.60%
Debt/Equity ratio	1.77	1.77
Cost of debt	4.10%	4.50%

After-tax WACC	7.6%	9.9%


Selected WACC	8.8%

6890.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 6890.HK:

cost_of_equity (17.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2) + 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.