826.HK WACC - Weighted Average Cost of Capital

The WACC of Tiangong International Co Ltd (826.HK) is 8.9%.

The Cost of Equity of Tiangong International Co Ltd (826.HK) is 10.75%.

The Cost of Debt of Tiangong International Co Ltd (826.HK) is 6.50%.

	Range	Selected
Cost of equity	9.40% - 12.10%	10.75%
Tax rate	6.70% - 10.10%	8.40%
Cost of debt	4.90% - 8.10%	6.50%
WACC	7.5% - 10.2%	8.9%

WACC

826.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.09	1.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	12.10%

Tax rate	6.70%	10.10%
Debt/Equity ratio	0.62	0.62
Cost of debt	4.90%	8.10%

After-tax WACC	7.5%	10.2%


Selected WACC	8.9%

826.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 826.HK:

cost_of_equity (10.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.09) + 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.