1476.HK WACC - Weighted Average Cost of Capital
The WACC of Hengtai Securities Co Ltd (1476.HK) is 6.8%.
| Range | Selected | |
| Cost of equity | 14.5% - 20.8% | 17.65% |
| Tax rate | 24.7% - 25.9% | 25.3% |
| Cost of debt | 4.1% - 4.5% | 4.3% |
| WACC | 6.0% - 7.7% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.94 | 2.43 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.5% | 20.8% |
| Tax rate | 24.7% | 25.9% |
| Debt/Equity ratio | 2.99 | 2.99 |
| Cost of debt | 4.1% | 4.5% |
| After-tax WACC | 6.0% | 7.7% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1476.HK | Hengtai Securities Co Ltd | 2.99 | 1.52 | 0.47 |
| 000686.SZ | Northeast Securities Co Ltd | 2.23 | 1.63 | 0.61 |
| 002961.SZ | Ruida Futures Co Ltd | 0.13 | 1.98 | 1.8 |
| 1461.HK | Luzheng Futures Co Ltd | 0.46 | 1.76 | 1.31 |
| 3678.HK | Holly Futures Co Ltd | 0.15 | 0.43 | 0.39 |
| 600155.SS | Polaris Bay Group Co Ltd | 1.58 | 1.75 | 0.8 |
| 600621.SS | Shanghai Chinafortune Co Ltd | 1.02 | 1.69 | 0.96 |
| 600909.SS | Huaan Securities Co Ltd | 1.91 | 1.58 | 0.65 |
| 601375.SS | Central China Securities Co Ltd | 1.01 | 1.72 | 0.98 |
| 603093.SS | Nanhua Futures Co Ltd | 0.08 | 1.9 | 1.8 |
| Low | High | |
| Unlevered beta | 0.74 | 0.97 |
| Relevered beta | 2.4 | 3.13 |
| Adjusted relevered beta | 1.94 | 2.43 |
1476.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 1476.HK:
cost_of_equity (17.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.94) + 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.