1293.HK WACC - Weighted Average Cost of Capital

The WACC of Grand Baoxin Auto Group Ltd (1293.HK) is 5.4%.

The Cost of Equity of Grand Baoxin Auto Group Ltd (1293.HK) is 65.95%.

The Cost of Debt of Grand Baoxin Auto Group Ltd (1293.HK) is 6.05%.

	Range	Selected
Cost of equity	34.90% - 97.00%	65.95%
Tax rate	39.60% - 44.20%	41.90%
Cost of debt	4.00% - 8.10%	6.05%
WACC	3.4% - 7.4%	5.4%

WACC

1293.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	5.35	13.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	34.90%	97.00%

Tax rate	39.60%	44.20%
Debt/Equity ratio	31.6	31.6
Cost of debt	4.00%	8.10%

After-tax WACC	3.4%	7.4%


Selected WACC	5.4%

1293.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 1293.HK:

cost_of_equity (65.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (5.35) + 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.