859.HK WACC - Weighted Average Cost of Capital

The WACC of Zhongchang International Holdings Group Ltd (859.HK) is 11.5%.

The Cost of Equity of Zhongchang International Holdings Group Ltd (859.HK) is 10.35%.

The Cost of Debt of Zhongchang International Holdings Group Ltd (859.HK) is 11.95%.

	Range	Selected
Cost of equity	5.50% - 15.20%	10.35%
Tax rate	0.80% - 3.00%	1.90%
Cost of debt	4.00% - 19.90%	11.95%
WACC	4.2% - 18.8%	11.5%

WACC

859.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	1.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	15.20%

Tax rate	0.80%	3.00%
Debt/Equity ratio	7.25	7.25
Cost of debt	4.00%	19.90%

After-tax WACC	4.2%	18.8%


Selected WACC	11.5%

859.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 859.HK:

cost_of_equity (10.35%) = 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.