976.HK WACC - Weighted Average Cost of Capital

The WACC of Chiho Environmental Group Ltd (976.HK) is 8.5%.

The Cost of Equity of Chiho Environmental Group Ltd (976.HK) is 9.65%.

The Cost of Debt of Chiho Environmental Group Ltd (976.HK) is 11.85%.

	Range	Selected
Cost of equity	6.20% - 13.10%	9.65%
Tax rate	29.40% - 37.20%	33.30%
Cost of debt	9.10% - 14.60%	11.85%
WACC	6.4% - 10.6%	8.5%

WACC

976.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.55	1.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	13.10%

Tax rate	29.40%	37.20%
Debt/Equity ratio	1.83	1.83
Cost of debt	9.10%	14.60%

After-tax WACC	6.4%	10.6%


Selected WACC	8.5%

976.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 976.HK:

cost_of_equity (9.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.