693.HK WACC - Weighted Average Cost of Capital

The WACC of Tan Chong International Ltd (693.HK) is 5.5%.

The Cost of Equity of Tan Chong International Ltd (693.HK) is 16.55%.

The Cost of Debt of Tan Chong International Ltd (693.HK) is 4.25%.

	Range	Selected
Cost of equity	13.40% - 19.70%	16.55%
Tax rate	33.00% - 36.90%	34.95%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.8% - 6.1%	5.5%

WACC

693.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.75	2.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.40%	19.70%

Tax rate	33.00%	36.90%
Debt/Equity ratio	4.08	4.08
Cost of debt	4.00%	4.50%

After-tax WACC	4.8%	6.1%


Selected WACC	5.5%

693.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 693.HK:

cost_of_equity (16.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.75) + 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.