8223.HK WACC - Weighted Average Cost of Capital

The WACC of Ziyuanyuan Holdings Group Ltd (8223.HK) is 6.7%.

The Cost of Equity of Ziyuanyuan Holdings Group Ltd (8223.HK) is 7.25%.

The Cost of Debt of Ziyuanyuan Holdings Group Ltd (8223.HK) is 7.05%.

	Range	Selected
Cost of equity	5.50% - 9.00%	7.25%
Tax rate	6.50% - 13.90%	10.20%
Cost of debt	6.00% - 8.10%	7.05%
WACC	5.6% - 7.8%	6.7%

WACC

8223.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.44	0.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	9.00%

Tax rate	6.50%	13.90%
Debt/Equity ratio	1.41	1.41
Cost of debt	6.00%	8.10%

After-tax WACC	5.6%	7.8%


Selected WACC	6.7%

8223.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 8223.HK:

cost_of_equity (7.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.