1251.HK WACC - Weighted Average Cost of Capital

The WACC of SPT Energy Group Inc (1251.HK) is 9.8%.

The Cost of Equity of SPT Energy Group Inc (1251.HK) is 23.90%.

The Cost of Debt of SPT Energy Group Inc (1251.HK) is 8.45%.

	Range	Selected
Cost of equity	20.40% - 27.40%	23.90%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	5.50% - 11.40%	8.45%
WACC	7.3% - 12.3%	9.8%

WACC

1251.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.92	3.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.40%	27.40%

Tax rate	22.10%	22.30%
Debt/Equity ratio	4.42	4.42
Cost of debt	5.50%	11.40%

After-tax WACC	7.3%	12.3%


Selected WACC	9.8%

1251.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 1251.HK:

cost_of_equity (23.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.92) + 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.