8196.HK WACC - Weighted Average Cost of Capital

The WACC of Great Water Holdings Ltd (8196.HK) is 13.6%.

The Cost of Equity of Great Water Holdings Ltd (8196.HK) is 10.90%.

The Cost of Debt of Great Water Holdings Ltd (8196.HK) is 18.30%.

	Range	Selected
Cost of equity	9.60% - 12.20%	10.90%
Tax rate	3.20% - 4.20%	3.70%
Cost of debt	7.00% - 29.60%	18.30%
WACC	8.4% - 18.9%	13.6%

WACC

8196.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.12	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	12.20%

Tax rate	3.20%	4.20%
Debt/Equity ratio	0.7	0.7
Cost of debt	7.00%	29.60%

After-tax WACC	8.4%	18.9%


Selected WACC	13.6%

8196.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 8196.HK:

cost_of_equity (10.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.12) + 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.