932.HK WACC - Weighted Average Cost of Capital

The WACC of Shunten International (Holdings) Ltd (932.HK) is 6.3%.

The Cost of Equity of Shunten International (Holdings) Ltd (932.HK) is 9.20%.

The Cost of Debt of Shunten International (Holdings) Ltd (932.HK) is 6.20%.

	Range	Selected
Cost of equity	5.60% - 12.80%	9.20%
Tax rate	7.00% - 39.80%	23.40%
Cost of debt	6.00% - 6.40%	6.20%
WACC	5.6% - 7.0%	6.3%

WACC

932.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.45	1.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	12.80%

Tax rate	7.00%	39.80%
Debt/Equity ratio	1.83	1.83
Cost of debt	6.00%	6.40%

After-tax WACC	5.6%	7.0%


Selected WACC	6.3%

932.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 932.HK:

cost_of_equity (9.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.