90.HK WACC - Weighted Average Cost of Capital

The WACC of Puxing Energy Ltd (90.HK) is 5.7%.

The Cost of Equity of Puxing Energy Ltd (90.HK) is 15.30%.

The Cost of Debt of Puxing Energy Ltd (90.HK) is 4.30%.

	Range	Selected
Cost of equity	13.60% - 17.00%	15.30%
Tax rate	32.50% - 33.00%	32.75%
Cost of debt	4.10% - 4.50%	4.30%
WACC	5.2% - 6.1%	5.7%

WACC

90.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.79	1.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.60%	17.00%

Tax rate	32.50%	33.00%
Debt/Equity ratio	3.46	3.46
Cost of debt	4.10%	4.50%

After-tax WACC	5.2%	6.1%


Selected WACC	5.7%

90.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 90.HK:

cost_of_equity (15.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.79) + 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.