1299.HK WACC - Weighted Average Cost of Capital

The WACC of AIA Group Ltd (1299.HK) is 9.5%.

The Cost of Equity of AIA Group Ltd (1299.HK) is 10.25%.

The Cost of Debt of AIA Group Ltd (1299.HK) is 5.00%.

	Range	Selected
Cost of equity	8.70% - 11.80%	10.25%
Tax rate	15.30% - 18.50%	16.90%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.2% - 10.8%	9.5%

WACC

1299.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.98	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	11.80%

Tax rate	15.30%	18.50%
Debt/Equity ratio	0.15	0.15
Cost of debt	5.00%	5.00%

After-tax WACC	8.2%	10.8%


Selected WACC	9.5%

1299.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 1299.HK:

cost_of_equity (10.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.98) + 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.