1098.HK WACC - Weighted Average Cost of Capital

The WACC of Road King Infrastructure Ltd (1098.HK) is 5.0%.

The Cost of Equity of Road King Infrastructure Ltd (1098.HK) is 18.05%.

The Cost of Debt of Road King Infrastructure Ltd (1098.HK) is 7.10%.

	Range	Selected
Cost of equity	11.30% - 24.80%	18.05%
Tax rate	26.60% - 46.10%	36.35%
Cost of debt	7.00% - 7.20%	7.10%
WACC	5.4% - 4.6%	5.0%

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	1.41	3

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	24.80%

Tax rate	26.60%	46.10%
Debt/Equity ratio	27.04	27.04
Cost of debt	7.00%	7.20%

After-tax WACC	5.4%	4.6%


Selected WACC	5.0%

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 (18.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.41) + 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.