1226.HK WACC - Weighted Average Cost of Capital
The WACC of China Investment and Finance Group Ltd (1226.HK) is 7.2%.
| Range | Selected | |
| Cost of equity | 5.6% - 8.9% | 7.25% |
| Tax rate | 22.1% - 22.3% | 22.2% |
| Cost of debt | 7.0% - 7.8% | 7.4% |
| WACC | 5.6% - 8.8% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.46 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 8.9% |
| Tax rate | 22.1% | 22.3% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 7.0% | 7.8% |
| After-tax WACC | 5.6% | 8.8% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1226.HK | China Investment and Finance Group Ltd | 0.02 | 0.92 | 0.91 |
| 1160.HK | Youth Champ Financial Group Holdings Ltd | 0.08 | 0.09 | 0.09 |
| 1217.HK | China Innovation Investment Ltd | 0.01 | 1.3 | 1.29 |
| 204.HK | China Investment Development Ltd | 1.16 | 0.48 | 0.25 |
| 339.HK | Core Economy Investment Group Ltd | 0.17 | 1.37 | 1.21 |
| 428.HK | Cocoon Holdings Ltd | 0.76 | -0.01 | -0.01 |
| 8088.HK | AID Life Science Holdings Ltd | 5.05 | 0.25 | 0.05 |
| 8340.HK | Vinco Financial Group Ltd | 1.47 | 0.72 | 0.34 |
| 851.HK | Sheng Yuan Holdings Ltd | 0.02 | -0.03 | -0.03 |
| 905.HK | Global Mastermind Capital Ltd | 0.01 | 1.18 | 1.17 |
| Low | High | |
| Unlevered beta | 0.19 | 0.57 |
| Relevered beta | 0.19 | 0.57 |
| Adjusted relevered beta | 0.46 | 0.71 |
1226.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 1226.HK:
cost_of_equity (7.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.