952.HK WACC - Weighted Average Cost of Capital

The WACC of China Tonghai International Financial Ltd (952.HK) is 6.3%.

The Cost of Equity of China Tonghai International Financial Ltd (952.HK) is 6.70%.

The Cost of Debt of China Tonghai International Financial Ltd (952.HK) is 5.70%.

	Range	Selected
Cost of equity	5.40% - 8.00%	6.70%
Tax rate	2.20% - 5.20%	3.70%
Cost of debt	4.40% - 7.00%	5.70%
WACC	5.0% - 7.5%	6.3%

WACC

952.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.42	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	8.00%

Tax rate	2.20%	5.20%
Debt/Equity ratio	0.57	0.57
Cost of debt	4.40%	7.00%

After-tax WACC	5.0%	7.5%


Selected WACC	6.3%

952.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 952.HK:

cost_of_equity (6.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.42) + 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.