1098.HK WACC - Weighted Average Cost of Capital
The WACC of Road King Infrastructure Ltd (1098.HK) is 5.4%.
| Range | Selected | |
| Cost of equity | 13.8% - 26.8% | 20.3% |
| Tax rate | 26.6% - 46.1% | 36.35% |
| Cost of debt | 7.0% - 8.3% | 7.65% |
| WACC | 5.5% - 5.3% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.83 | 3.28 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.8% | 26.8% |
| Tax rate | 26.6% | 46.1% |
| Debt/Equity ratio | 26.43 | 26.43 |
| Cost of debt | 7.0% | 8.3% |
| After-tax WACC | 5.5% | 5.3% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1098.HK | Road King Infrastructure Ltd | 26.43 | 1.79 | 0.11 |
| 185.HK | Zensun Enterprises Ltd | 84.1 | 0.11 | 0 |
| 190.HK | HKC (Holdings) Ltd | 0.85 | 0.91 | 0.61 |
| 1908.HK | C&D International Investment Group Ltd | 3.21 | 1.35 | 0.47 |
| 2330.HK | China Uptown Group Co Ltd | 0.27 | 0.29 | 0.25 |
| 2768.HK | Jiayuan International Group Ltd | 20.95 | 1.09 | 0.08 |
| 754.HK | Hopson Development Holdings Ltd | 6.86 | 1.78 | 0.35 |
| 81.HK | China Overseas Grand Oceans Group Ltd | 7.08 | 1.52 | 0.29 |
| 846.HK | Mingfa Group (International) Co Ltd | 3.06 | 0.43 | 0.15 |
| 978.HK | China Merchants Land Ltd | 37.18 | 1.64 | 0.07 |
| Low | High | |
| Unlevered beta | 0.14 | 0.27 |
| Relevered beta | 2.24 | 4.4 |
| Adjusted relevered beta | 1.83 | 3.28 |
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 (20.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.83) + 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.