1114.HK WACC - Weighted Average Cost of Capital

The WACC of Brilliance China Automotive Holdings Ltd (1114.HK) is 7.0%.

The Cost of Equity of Brilliance China Automotive Holdings Ltd (1114.HK) is 7.10%.

The Cost of Debt of Brilliance China Automotive Holdings Ltd (1114.HK) is 5.50%.

	Range	Selected
Cost of equity	5.40% - 8.80%	7.10%
Tax rate	3.90% - 10.00%	6.95%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.4% - 8.7%	7.0%

WACC

1114.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.43	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	8.80%

Tax rate	3.90%	10.00%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	7.00%

After-tax WACC	5.4%	8.7%


Selected WACC	7.0%

1114.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 1114.HK:

cost_of_equity (7.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.