1146.HK WACC - Weighted Average Cost of Capital

The WACC of China Outfitters Holdings Ltd (1146.HK) is 6.1%.

The Cost of Equity of China Outfitters Holdings Ltd (1146.HK) is 6.25%.

The Cost of Debt of China Outfitters Holdings Ltd (1146.HK) is 5.00%.

	Range	Selected
Cost of equity	5.30% - 7.20%	6.25%
Tax rate	25.90% - 28.20%	27.05%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.2% - 7.0%	6.1%

WACC

1146.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.41	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	7.20%

Tax rate	25.90%	28.20%
Debt/Equity ratio	0.05	0.05
Cost of debt	5.00%	5.00%

After-tax WACC	5.2%	7.0%


Selected WACC	6.1%

1146.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 1146.HK:

cost_of_equity (6.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.