1200.HK WACC - Weighted Average Cost of Capital

The WACC of Midland Holdings Ltd (1200.HK) is 7.3%.

The Cost of Equity of Midland Holdings Ltd (1200.HK) is 10.80%.

The Cost of Debt of Midland Holdings Ltd (1200.HK) is 4.65%.

	Range	Selected
Cost of equity	7.90% - 13.70%	10.80%
Tax rate	13.00% - 20.40%	16.70%
Cost of debt	4.00% - 5.30%	4.65%
WACC	5.7% - 8.9%	7.3%

WACC

1200.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.85	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	13.70%

Tax rate	13.00%	20.40%
Debt/Equity ratio	1.02	1.02
Cost of debt	4.00%	5.30%

After-tax WACC	5.7%	8.9%


Selected WACC	7.3%

1200.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 1200.HK:

cost_of_equity (10.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.85) + 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.