6958.HK WACC - Weighted Average Cost of Capital

The WACC of Zhenro Services Group Ltd (6958.HK) is 7.9%.

The Cost of Equity of Zhenro Services Group Ltd (6958.HK) is 16.10%.

The Cost of Debt of Zhenro Services Group Ltd (6958.HK) is 5.50%.

	Range	Selected
Cost of equity	12.60% - 19.60%	16.10%
Tax rate	11.90% - 18.50%	15.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.1% - 9.7%	7.9%

WACC

6958.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.63	2.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	19.60%

Tax rate	11.90%	18.50%
Debt/Equity ratio	2.51	2.51
Cost of debt	4.00%	7.00%

After-tax WACC	6.1%	9.7%


Selected WACC	7.9%

6958.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 6958.HK:

cost_of_equity (16.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.63) + 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.