1098.HK WACC - Weighted Average Cost of Capital

The WACC of Road King Infrastructure Ltd (1098.HK) is 5.6%.

The Cost of Equity of Road King Infrastructure Ltd (1098.HK) is 7.35%.

The Cost of Debt of Road King Infrastructure Ltd (1098.HK) is 6.55%.

	Range	Selected
Cost of equity	6.00% - 8.70%	7.35%
Tax rate	3.30% - 24.30%	13.80%
Cost of debt	6.10% - 7.00%	6.55%
WACC	5.9% - 5.4%	5.6%

WACC

1098.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.52	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	8.70%

Tax rate	3.30%	24.30%
Debt/Equity ratio	43.79	43.79
Cost of debt	6.10%	7.00%

After-tax WACC	5.9%	5.4%


Selected WACC	5.6%

1098.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 1098.HK:

cost_of_equity (7.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.52) + 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.