1052.HK WACC - Weighted Average Cost of Capital

The WACC of Yuexiu Transport infrastructure Ltd (1052.HK) is 4.6%.

The Cost of Equity of Yuexiu Transport infrastructure Ltd (1052.HK) is 8.75%.

The Cost of Debt of Yuexiu Transport infrastructure Ltd (1052.HK) is 4.55%.

	Range	Selected
Cost of equity	6.40% - 11.10%	8.75%
Tax rate	24.70% - 26.40%	25.55%
Cost of debt	4.00% - 5.10%	4.55%
WACC	3.8% - 5.4%	4.6%

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	0.59	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	11.10%

Tax rate	24.70%	26.40%
Debt/Equity ratio	3.41	3.41
Cost of debt	4.00%	5.10%

After-tax WACC	3.8%	5.4%


Selected WACC	4.6%

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 (8.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.59) + 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.