1222.HK WACC - Weighted Average Cost of Capital

The WACC of Wang On Group Ltd (1222.HK) is 7.9%.

The Cost of Equity of Wang On Group Ltd (1222.HK) is 42.85%.

The Cost of Debt of Wang On Group Ltd (1222.HK) is 6.40%.

	Range	Selected
Cost of equity	29.10% - 56.60%	42.85%
Tax rate	2.80% - 14.70%	8.75%
Cost of debt	5.80% - 7.00%	6.40%
WACC	7.0% - 8.8%	7.9%

WACC

1222.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	4.38	7.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	29.10%	56.60%

Tax rate	2.80%	14.70%
Debt/Equity ratio	16.65	16.65
Cost of debt	5.80%	7.00%

After-tax WACC	7.0%	8.8%


Selected WACC	7.9%

1222.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 1222.HK:

cost_of_equity (42.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.38) + 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.