9983.HK WACC - Weighted Average Cost of Capital

The WACC of Central China New Life Ltd (9983.HK) is 9.6%.

The Cost of Equity of Central China New Life Ltd (9983.HK) is 9.80%.

The Cost of Debt of Central China New Life Ltd (9983.HK) is 6.65%.

	Range	Selected
Cost of equity	8.20% - 11.40%	9.80%
Tax rate	20.90% - 22.40%	21.65%
Cost of debt	4.00% - 9.30%	6.65%
WACC	8.0% - 11.2%	9.6%

WACC

9983.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.89	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	11.40%

Tax rate	20.90%	22.40%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	9.30%

After-tax WACC	8.0%	11.2%


Selected WACC	9.6%

9983.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 9983.HK:

cost_of_equity (9.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.89) + 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.