6958.HK WACC - Weighted Average Cost of Capital

The WACC of Zhenro Services Group Ltd (6958.HK) is 7.8%.

The Cost of Equity of Zhenro Services Group Ltd (6958.HK) is 13.50%.

The Cost of Debt of Zhenro Services Group Ltd (6958.HK) is 6.85%.

	Range	Selected
Cost of equity	10.70% - 16.30%	13.50%
Tax rate	20.30% - 24.70%	22.50%
Cost of debt	4.00% - 9.70%	6.85%
WACC	5.5% - 10.1%	7.8%

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	1.31	1.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	16.30%

Tax rate	20.30%	24.70%
Debt/Equity ratio	2.21	2.21
Cost of debt	4.00%	9.70%

After-tax WACC	5.5%	10.1%


Selected WACC	7.8%

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 (13.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.31) + 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.