1176.HK WACC - Weighted Average Cost of Capital

The WACC of Zhuguang Holdings Group Company Ltd (1176.HK) is 11.1%.

The Cost of Equity of Zhuguang Holdings Group Company Ltd (1176.HK) is 12.50%.

The Cost of Debt of Zhuguang Holdings Group Company Ltd (1176.HK) is 13.35%.

	Range	Selected
Cost of equity	9.50% - 15.50%	12.50%
Tax rate	9.70% - 20.10%	14.90%
Cost of debt	6.80% - 19.90%	13.35%
WACC	6.3% - 15.9%	11.1%

WACC

1176.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.11	1.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	15.50%

Tax rate	9.70%	20.10%
Debt/Equity ratio	19.94	19.94
Cost of debt	6.80%	19.90%

After-tax WACC	6.3%	15.9%


Selected WACC	11.1%

1176.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 1176.HK:

cost_of_equity (12.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.11) + 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.