1338.HK WACC - Weighted Average Cost of Capital

The WACC of BaWang International Group Holding Ltd (1338.HK) is 8.7%.

The Cost of Equity of BaWang International Group Holding Ltd (1338.HK) is 9.05%.

The Cost of Debt of BaWang International Group Holding Ltd (1338.HK) is 5.15%.

	Range	Selected
Cost of equity	7.50% - 10.60%	9.05%
Tax rate	0.30% - 0.60%	0.45%
Cost of debt	4.00% - 6.30%	5.15%
WACC	7.2% - 10.3%	8.7%

WACC

1338.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.77	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	10.60%

Tax rate	0.30%	0.60%
Debt/Equity ratio	0.09	0.09
Cost of debt	4.00%	6.30%

After-tax WACC	7.2%	10.3%


Selected WACC	8.7%

1338.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 1338.HK:

cost_of_equity (9.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.77) + 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.