769.HK WACC - Weighted Average Cost of Capital

The WACC of China Rare Earth Holdings Ltd (769.HK) is 9.9%.

The Cost of Equity of China Rare Earth Holdings Ltd (769.HK) is 9.85%.

The Cost of Debt of China Rare Earth Holdings Ltd (769.HK) is 11.30%.

	Range	Selected
Cost of equity	8.40% - 11.30%	9.85%
Tax rate	0.50% - 4.10%	2.30%
Cost of debt	7.00% - 15.60%	11.30%
WACC	8.4% - 11.3%	9.9%

WACC

769.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.93	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.40%	11.30%

Tax rate	0.50%	4.10%
Debt/Equity ratio	0	0
Cost of debt	7.00%	15.60%

After-tax WACC	8.4%	11.3%


Selected WACC	9.9%

769.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 769.HK:

cost_of_equity (9.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.93) + 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.