966.HK WACC - Weighted Average Cost of Capital

The WACC of China Taiping Insurance Holdings Co Ltd (966.HK) is 7.9%.

The Cost of Equity of China Taiping Insurance Holdings Co Ltd (966.HK) is 18.15%.

The Cost of Debt of China Taiping Insurance Holdings Co Ltd (966.HK) is 5.00%.

	Range	Selected
Cost of equity	14.60% - 21.70%	18.15%
Tax rate	17.40% - 27.40%	22.40%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.0% - 8.7%	7.9%

WACC

966.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.95	2.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.60%	21.70%

Tax rate	17.40%	27.40%
Debt/Equity ratio	2.57	2.57
Cost of debt	5.00%	5.00%

After-tax WACC	7.0%	8.7%


Selected WACC	7.9%

966.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 966.HK:

cost_of_equity (18.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.95) + 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.