798.HK WACC - Weighted Average Cost of Capital

The WACC of China Electronics Optics Valley Union Holding Co Ltd (798.HK) is 5.4%.

The Cost of Equity of China Electronics Optics Valley Union Holding Co Ltd (798.HK) is 17.75%.

The Cost of Debt of China Electronics Optics Valley Union Holding Co Ltd (798.HK) is 6.45%.

	Range	Selected
Cost of equity	12.80% - 22.70%	17.75%
Tax rate	45.20% - 46.70%	45.95%
Cost of debt	4.80% - 8.10%	6.45%
WACC	4.0% - 6.8%	5.4%

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	1.65	2.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.80%	22.70%

Tax rate	45.20%	46.70%
Debt/Equity ratio	6.38	6.38
Cost of debt	4.80%	8.10%

After-tax WACC	4.0%	6.8%


Selected WACC	5.4%

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 (17.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.65) + 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.