698.HK WACC - Weighted Average Cost of Capital

The WACC of Tongda Group Holdings Ltd (698.HK) is 10.1%.

The Cost of Equity of Tongda Group Holdings Ltd (698.HK) is 21.75%.

The Cost of Debt of Tongda Group Holdings Ltd (698.HK) is 6.45%.

	Range	Selected
Cost of equity	15.20% - 28.30%	21.75%
Tax rate	3.90% - 9.50%	6.70%
Cost of debt	4.80% - 8.10%	6.45%
WACC	7.4% - 12.8%	10.1%

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	2.06	3.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.20%	28.30%

Tax rate	3.90%	9.50%
Debt/Equity ratio	2.82	2.82
Cost of debt	4.80%	8.10%

After-tax WACC	7.4%	12.8%


Selected WACC	10.1%

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 (21.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.06) + 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.