698.HK WACC - Weighted Average Cost of Capital

The WACC of Tongda Group Holdings Ltd (698.HK) is 5.7%.

The Cost of Equity of Tongda Group Holdings Ltd (698.HK) is 6.40%.

The Cost of Debt of Tongda Group Holdings Ltd (698.HK) is 6.10%.

	Range	Selected
Cost of equity	5.20% - 7.60%	6.40%
Tax rate	11.60% - 16.60%	14.10%
Cost of debt	5.20% - 7.00%	6.10%
WACC	4.8% - 6.6%	5.7%

WACC

698.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.39	0.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	7.60%

Tax rate	11.60%	16.60%
Debt/Equity ratio	1.36	1.36
Cost of debt	5.20%	7.00%

After-tax WACC	4.8%	6.6%


Selected WACC	5.7%

698.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 698.HK:

cost_of_equity (6.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.39) + 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.