1297.HK WACC - Weighted Average Cost of Capital

The WACC of Sinosoft Technology Group Ltd (1297.HK) is 11.3%.

The Cost of Equity of Sinosoft Technology Group Ltd (1297.HK) is 12.00%.

The Cost of Debt of Sinosoft Technology Group Ltd (1297.HK) is 7.10%.

	Range	Selected
Cost of equity	10.60% - 13.40%	12.00%
Tax rate	14.10% - 14.80%	14.45%
Cost of debt	7.00% - 7.20%	7.10%
WACC	10.0% - 12.5%	11.3%

WACC

1297.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.29	1.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	13.40%

Tax rate	14.10%	14.80%
Debt/Equity ratio	0.13	0.13
Cost of debt	7.00%	7.20%

After-tax WACC	10.0%	12.5%


Selected WACC	11.3%

1297.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 1297.HK:

cost_of_equity (12.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.29) + 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.