8270.HK WACC - Weighted Average Cost of Capital

The WACC of China CBM Group Co Ltd (8270.HK) is 8.9%.

The Cost of Equity of China CBM Group Co Ltd (8270.HK) is 9.10%.

The Cost of Debt of China CBM Group Co Ltd (8270.HK) is 8.30%.

	Range	Selected
Cost of equity	7.40% - 10.80%	9.10%
Tax rate	2.30% - 3.80%	3.05%
Cost of debt	7.00% - 9.60%	8.30%
WACC	7.3% - 10.5%	8.9%

WACC

8270.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.75	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	10.80%

Tax rate	2.30%	3.80%
Debt/Equity ratio	0.25	0.25
Cost of debt	7.00%	9.60%

After-tax WACC	7.3%	10.5%


Selected WACC	8.9%

8270.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 8270.HK:

cost_of_equity (9.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.75) + 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.