6966.HK WACC - Weighted Average Cost of Capital

The WACC of China Wan Tong Yuan (Holdings) Ltd (6966.HK) is 7.2%.

The Cost of Equity of China Wan Tong Yuan (Holdings) Ltd (6966.HK) is 7.20%.

The Cost of Debt of China Wan Tong Yuan (Holdings) Ltd (6966.HK) is 23.40%.

	Range	Selected
Cost of equity	6.20% - 8.20%	7.20%
Tax rate	29.10% - 31.40%	30.25%
Cost of debt	7.00% - 39.80%	23.40%
WACC	6.2% - 8.2%	7.2%

WACC

6966.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.55	0.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.20%

Tax rate	29.10%	31.40%
Debt/Equity ratio	0	0
Cost of debt	7.00%	39.80%

After-tax WACC	6.2%	8.2%


Selected WACC	7.2%

6966.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 6966.HK:

cost_of_equity (7.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.