1268.HK WACC - Weighted Average Cost of Capital

The WACC of China MeiDong Auto Holdings Ltd (1268.HK) is 8.9%.

The Cost of Equity of China MeiDong Auto Holdings Ltd (1268.HK) is 13.40%.

The Cost of Debt of China MeiDong Auto Holdings Ltd (1268.HK) is 9.70%.

	Range	Selected
Cost of equity	10.10% - 16.70%	13.40%
Tax rate	26.00% - 30.30%	28.15%
Cost of debt	4.80% - 14.60%	9.70%
WACC	5.6% - 12.2%	8.9%

WACC

1268.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.22	1.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	16.70%

Tax rate	26.00%	30.30%
Debt/Equity ratio	2.26	2.26
Cost of debt	4.80%	14.60%

After-tax WACC	5.6%	12.2%


Selected WACC	8.9%

1268.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 1268.HK:

cost_of_equity (13.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.22) + 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.