9961.HK WACC - Weighted Average Cost of Capital

The WACC of Trip.com Group Ltd (9961.HK) is 6.6%.

The Cost of Equity of Trip.com Group Ltd (9961.HK) is 7.05%.

The Cost of Debt of Trip.com Group Ltd (9961.HK) is 4.25%.

	Range	Selected
Cost of equity	6.10% - 8.00%	7.05%
Tax rate	16.00% - 20.20%	18.10%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.7% - 7.5%	6.6%

WACC

9961.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.53	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.00%

Tax rate	16.00%	20.20%
Debt/Equity ratio	0.14	0.14
Cost of debt	4.00%	4.50%

After-tax WACC	5.7%	7.5%


Selected WACC	6.6%

9961.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 9961.HK:

cost_of_equity (7.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.53) + 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.