1091.HK WACC - Weighted Average Cost of Capital

The WACC of South Manganese Investment Ltd (1091.HK) is 9.3%.

The Cost of Equity of South Manganese Investment Ltd (1091.HK) is 28.35%.

The Cost of Debt of South Manganese Investment Ltd (1091.HK) is 5.95%.

	Range	Selected
Cost of equity	23.70% - 33.00%	28.35%
Tax rate	11.60% - 21.60%	16.60%
Cost of debt	4.90% - 7.00%	5.95%
WACC	7.9% - 10.6%	9.3%

WACC

1091.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	3.48	4.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	23.70%	33.00%

Tax rate	11.60%	21.60%
Debt/Equity ratio	4.34	4.34
Cost of debt	4.90%	7.00%

After-tax WACC	7.9%	10.6%


Selected WACC	9.3%

1091.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 1091.HK:

cost_of_equity (28.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (3.48) + 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.