8270.HK WACC - Weighted Average Cost of Capital

The WACC of China CBM Group Co Ltd (8270.HK) is 8.2%.

The Cost of Equity of China CBM Group Co Ltd (8270.HK) is 8.45%.

The Cost of Debt of China CBM Group Co Ltd (8270.HK) is 7.35%.

	Range	Selected
Cost of equity	5.90% - 11.00%	8.45%
Tax rate	2.30% - 3.80%	3.05%
Cost of debt	7.00% - 7.70%	7.35%
WACC	6.0% - 10.3%	8.2%

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	0.5	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	11.00%

Tax rate	2.30%	3.80%
Debt/Equity ratio	0.22	0.22
Cost of debt	7.00%	7.70%

After-tax WACC	6.0%	10.3%


Selected WACC	8.2%

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 (8.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.