8117.HK WACC - Weighted Average Cost of Capital

The WACC of China Primary Energy Holdings Ltd (8117.HK) is 5.0%.

The Cost of Equity of China Primary Energy Holdings Ltd (8117.HK) is 8.95%.

The Cost of Debt of China Primary Energy Holdings Ltd (8117.HK) is 5.50%.

	Range	Selected
Cost of equity	7.00% - 10.90%	8.95%
Tax rate	11.30% - 25.80%	18.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.0% - 6.0%	5.0%

WACC

8117.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.7	1.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	10.90%

Tax rate	11.30%	25.80%
Debt/Equity ratio	6.12	6.12
Cost of debt	4.00%	7.00%

After-tax WACC	4.0%	6.0%


Selected WACC	5.0%

8117.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 8117.HK:

cost_of_equity (8.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.7) + 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.