899.HK WACC - Weighted Average Cost of Capital

The WACC of Asia Resources Holdings Ltd (899.HK) is 7.7%.

The Cost of Equity of Asia Resources Holdings Ltd (899.HK) is 7.50%.

The Cost of Debt of Asia Resources Holdings Ltd (899.HK) is 11.45%.

	Range	Selected
Cost of equity	6.40% - 8.60%	7.50%
Tax rate	4.70% - 7.10%	5.90%
Cost of debt	7.00% - 15.90%	11.45%
WACC	6.5% - 9.0%	7.7%

WACC

899.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.6	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	8.60%

Tax rate	4.70%	7.10%
Debt/Equity ratio	0.06	0.06
Cost of debt	7.00%	15.90%

After-tax WACC	6.5%	9.0%


Selected WACC	7.7%

899.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 899.HK:

cost_of_equity (7.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.6) + 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.