1161.HK WACC - Weighted Average Cost of Capital

The WACC of Water Oasis Group Ltd (1161.HK) is 6.9%.

The Cost of Equity of Water Oasis Group Ltd (1161.HK) is 7.75%.

The Cost of Debt of Water Oasis Group Ltd (1161.HK) is 4.25%.

	Range	Selected
Cost of equity	6.50% - 9.00%	7.75%
Tax rate	23.50% - 26.40%	24.95%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.8% - 7.9%	6.9%

WACC

1161.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.6	0.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.00%

Tax rate	23.50%	26.40%
Debt/Equity ratio	0.24	0.24
Cost of debt	4.00%	4.50%

After-tax WACC	5.8%	7.9%


Selected WACC	6.9%

1161.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 1161.HK:

cost_of_equity (7.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.6) + 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.