769.HK WACC - Weighted Average Cost of Capital

The WACC of China Rare Earth Holdings Ltd (769.HK) is 8.8%.

The Cost of Equity of China Rare Earth Holdings Ltd (769.HK) is 8.85%.

The Cost of Debt of China Rare Earth Holdings Ltd (769.HK) is 10.60%.

	Range	Selected
Cost of equity	7.60% - 10.10%	8.85%
Tax rate	0.50% - 4.10%	2.30%
Cost of debt	7.00% - 14.20%	10.60%
WACC	7.6% - 10.1%	8.8%

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	0.79	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	10.10%

Tax rate	0.50%	4.10%
Debt/Equity ratio	0	0
Cost of debt	7.00%	14.20%

After-tax WACC	7.6%	10.1%


Selected WACC	8.8%

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 (8.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.79) + 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.