997.HK WACC - Weighted Average Cost of Capital

The WACC of Chinlink International Holdings Ltd (997.HK) is 7.7%.

The Cost of Equity of Chinlink International Holdings Ltd (997.HK) is 119.20%.

The Cost of Debt of Chinlink International Holdings Ltd (997.HK) is 6.00%.

	Range	Selected
Cost of equity	89.10% - 149.30%	119.20%
Tax rate	7.20% - 9.60%	8.40%
Cost of debt	6.00% - 6.00%	6.00%
WACC	7.2% - 8.2%	7.7%

WACC

997.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	14.42	20.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	89.10%	149.30%

Tax rate	7.20%	9.60%
Debt/Equity ratio	50.36	50.36
Cost of debt	6.00%	6.00%

After-tax WACC	7.2%	8.2%


Selected WACC	7.7%

997.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 997.HK:

cost_of_equity (119.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (14.42) + 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.