1052.HK WACC - Weighted Average Cost of Capital

The WACC of Yuexiu Transport infrastructure Ltd (1052.HK) is 5.7%.

The Cost of Equity of Yuexiu Transport infrastructure Ltd (1052.HK) is 12.50%.

The Cost of Debt of Yuexiu Transport infrastructure Ltd (1052.HK) is 5.00%.

	Range	Selected
Cost of equity	8.20% - 16.80%	12.50%
Tax rate	26.80% - 28.80%	27.80%
Cost of debt	4.00% - 6.00%	5.00%
WACC	4.2% - 7.3%	5.7%

WACC

1052.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	1.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	16.80%

Tax rate	26.80%	28.80%
Debt/Equity ratio	3.18	3.18
Cost of debt	4.00%	6.00%

After-tax WACC	4.2%	7.3%


Selected WACC	5.7%

1052.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 1052.HK:

cost_of_equity (12.50%) = 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.