715.HK WACC - Weighted Average Cost of Capital

The WACC of China Oceanwide Holdings Ltd (715.HK) is 5.1%.

The Cost of Equity of China Oceanwide Holdings Ltd (715.HK) is 12.80%.

The Cost of Debt of China Oceanwide Holdings Ltd (715.HK) is 5.50%.

	Range	Selected
Cost of equity	8.30% - 17.30%	12.80%
Tax rate	3.00% - 16.10%	9.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.0% - 6.2%	5.1%

WACC

715.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.91	1.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	17.30%

Tax rate	3.00%	16.10%
Debt/Equity ratio	29.51	29.51
Cost of debt	4.00%	7.00%

After-tax WACC	4.0%	6.2%


Selected WACC	5.1%

715.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 715.HK:

cost_of_equity (12.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.91) + 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.