392.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Enterprises Holdings Ltd (392.HK) is 5.5%.

The Cost of Equity of Beijing Enterprises Holdings Ltd (392.HK) is 7.45%.

The Cost of Debt of Beijing Enterprises Holdings Ltd (392.HK) is 5.25%.

	Range	Selected
Cost of equity	6.30% - 8.60%	7.45%
Tax rate	11.80% - 12.90%	12.35%
Cost of debt	4.00% - 6.50%	5.25%
WACC	4.4% - 6.6%	5.5%

WACC

392.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.57	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	8.60%

Tax rate	11.80%	12.90%
Debt/Equity ratio	2.01	2.01
Cost of debt	4.00%	6.50%

After-tax WACC	4.4%	6.6%


Selected WACC	5.5%

392.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 392.HK:

cost_of_equity (7.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.57) + 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.