809.HK WACC - Weighted Average Cost of Capital

The WACC of Global Bio-chem Technology Group Co Ltd (809.HK) is 8.8%.

The Cost of Equity of Global Bio-chem Technology Group Co Ltd (809.HK) is 25.30%.

The Cost of Debt of Global Bio-chem Technology Group Co Ltd (809.HK) is 5.50%.

	Range	Selected
Cost of equity	17.50% - 33.10%	25.30%
Tax rate	2.40% - 3.20%	2.80%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.3% - 11.4%	8.8%

WACC

809.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.44	4.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.50%	33.10%

Tax rate	2.40%	3.20%
Debt/Equity ratio	4.73	4.73
Cost of debt	4.00%	7.00%

After-tax WACC	6.3%	11.4%


Selected WACC	8.8%

809.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 809.HK:

cost_of_equity (25.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.44) + 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.