8047.HK WACC - Weighted Average Cost of Capital

The WACC of China Ocean Group Development Ltd (8047.HK) is 7.5%.

The Cost of Equity of China Ocean Group Development Ltd (8047.HK) is 6.80%.

The Cost of Debt of China Ocean Group Development Ltd (8047.HK) is 8.55%.

	Range	Selected
Cost of equity	5.60% - 8.00%	6.80%
Tax rate	0.40% - 0.70%	0.55%
Cost of debt	7.00% - 10.10%	8.55%
WACC	6.2% - 8.8%	7.5%

WACC

8047.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.45	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	8.00%

Tax rate	0.40%	0.70%
Debt/Equity ratio	0.77	0.77
Cost of debt	7.00%	10.10%

After-tax WACC	6.2%	8.8%


Selected WACC	7.5%

8047.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 8047.HK:

cost_of_equity (6.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.