798.HK WACC - Weighted Average Cost of Capital

The WACC of China Electronics Optics Valley Union Holding Co Ltd (798.HK) is 4.6%.

The Cost of Equity of China Electronics Optics Valley Union Holding Co Ltd (798.HK) is 14.85%.

The Cost of Debt of China Electronics Optics Valley Union Holding Co Ltd (798.HK) is 5.65%.

	Range	Selected
Cost of equity	12.50% - 17.20%	14.85%
Tax rate	45.20% - 46.70%	45.95%
Cost of debt	4.80% - 6.50%	5.65%
WACC	3.9% - 5.3%	4.6%

WACC

798.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.61	1.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	17.20%

Tax rate	45.20%	46.70%
Debt/Equity ratio	6.49	6.49
Cost of debt	4.80%	6.50%

After-tax WACC	3.9%	5.3%


Selected WACC	4.6%

798.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 798.HK:

cost_of_equity (14.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.61) + 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.