1266.HK WACC - Weighted Average Cost of Capital

The WACC of Xiwang Special Steel Co Ltd (1266.HK) is 8.7%.

The Cost of Equity of Xiwang Special Steel Co Ltd (1266.HK) is 719.30%.

The Cost of Debt of Xiwang Special Steel Co Ltd (1266.HK) is 6.30%.

	Range	Selected
Cost of equity	622.00% - 816.60%	719.30%
Tax rate	17.20% - 18.70%	17.95%
Cost of debt	5.60% - 7.00%	6.30%
WACC	7.7% - 9.7%	8.7%

WACC

1266.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	103.53	116.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	622.00%	816.60%

Tax rate	17.20%	18.70%
Debt/Equity ratio	201.45	201.45
Cost of debt	5.60%	7.00%

After-tax WACC	7.7%	9.7%


Selected WACC	8.7%

1266.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 1266.HK:

cost_of_equity (719.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (103.53) + 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.