8196.HK WACC - Weighted Average Cost of Capital

The WACC of Great Water Holdings Ltd (8196.HK) is 7.5%.

The Cost of Equity of Great Water Holdings Ltd (8196.HK) is 7.70%.

The Cost of Debt of Great Water Holdings Ltd (8196.HK) is 7.30%.

	Range	Selected
Cost of equity	6.20% - 9.20%	7.70%
Tax rate	3.20% - 4.20%	3.70%
Cost of debt	7.00% - 7.60%	7.30%
WACC	6.3% - 8.7%	7.5%

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	0.56	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	9.20%

Tax rate	3.20%	4.20%
Debt/Equity ratio	0.38	0.38
Cost of debt	7.00%	7.60%

After-tax WACC	6.3%	8.7%


Selected WACC	7.5%

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 (7.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.