1496.HK WACC - Weighted Average Cost of Capital

The WACC of AP Rentals Holdings Ltd (1496.HK) is 7.3%.

The Cost of Equity of AP Rentals Holdings Ltd (1496.HK) is 8.15%.

The Cost of Debt of AP Rentals Holdings Ltd (1496.HK) is 5.50%.

	Range	Selected
Cost of equity	6.70% - 9.60%	8.15%
Tax rate	14.40% - 15.30%	14.85%
Cost of debt	5.00% - 6.00%	5.50%
WACC	6.1% - 8.4%	7.3%

WACC

1496.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.65	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.60%

Tax rate	14.40%	15.30%
Debt/Equity ratio	0.34	0.34
Cost of debt	5.00%	6.00%

After-tax WACC	6.1%	8.4%


Selected WACC	7.3%

1496.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 1496.HK:

cost_of_equity (8.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.65) + 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.