951.HK WACC - Weighted Average Cost of Capital

The WACC of Chaowei Power Holdings Ltd (951.HK) is 7.6%.

The Cost of Equity of Chaowei Power Holdings Ltd (951.HK) is 29.50%.

The Cost of Debt of Chaowei Power Holdings Ltd (951.HK) is 6.10%.

	Range	Selected
Cost of equity	26.50% - 32.50%	29.50%
Tax rate	29.10% - 30.60%	29.85%
Cost of debt	5.70% - 6.50%	6.10%
WACC	7.0% - 8.2%	7.6%

WACC

951.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	3.96	4.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	26.50%	32.50%

Tax rate	29.10%	30.60%
Debt/Equity ratio	6.67	6.67
Cost of debt	5.70%	6.50%

After-tax WACC	7.0%	8.2%


Selected WACC	7.6%

951.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 951.HK:

cost_of_equity (29.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (3.96) + 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.