1296.HK WACC - Weighted Average Cost of Capital

The WACC of Guodian Technology & Environment Group Corp Ltd (1296.HK) is 7.8%.

The Cost of Equity of Guodian Technology & Environment Group Corp Ltd (1296.HK) is 11.45%.

The Cost of Debt of Guodian Technology & Environment Group Corp Ltd (1296.HK) is 5.85%.

	Range	Selected
Cost of equity	9.60% - 13.30%	11.45%
Tax rate	22.50% - 22.60%	22.55%
Cost of debt	4.70% - 7.00%	5.85%
WACC	6.4% - 9.1%	7.8%

WACC

1296.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	1.23	1.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	13.30%

Tax rate	22.50%	22.60%
Debt/Equity ratio	1.14	1.14
Cost of debt	4.70%	7.00%

After-tax WACC	6.4%	9.1%


Selected WACC	7.8%

1296.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 1296.HK:

cost_of_equity (11.45%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (1.23) + 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.