1122.HK WACC - Weighted Average Cost of Capital

The WACC of Qingling Motors Co Ltd (1122.HK) is 10.1%.

The Cost of Equity of Qingling Motors Co Ltd (1122.HK) is 10.15%.

The Cost of Debt of Qingling Motors Co Ltd (1122.HK) is 5.50%.

	Range	Selected
Cost of equity	8.90% - 11.40%	10.15%
Tax rate	5.00% - 17.70%	11.35%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.8% - 11.3%	10.1%

WACC

1122.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.01	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.90%	11.40%

Tax rate	5.00%	17.70%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	7.00%

After-tax WACC	8.8%	11.3%


Selected WACC	10.1%

1122.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 1122.HK:

cost_of_equity (10.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.01) + 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.