1496.HK WACC - Weighted Average Cost of Capital

The WACC of AP Rentals Holdings Ltd (1496.HK) is 6.2%.

The Cost of Equity of AP Rentals Holdings Ltd (1496.HK) is 6.95%.

The Cost of Debt of AP Rentals Holdings Ltd (1496.HK) is 4.45%.

	Range	Selected
Cost of equity	5.80% - 8.10%	6.95%
Tax rate	12.10% - 14.00%	13.05%
Cost of debt	4.00% - 4.90%	4.45%
WACC	5.3% - 7.2%	6.2%

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	0.49	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.10%

Tax rate	12.10%	14.00%
Debt/Equity ratio	0.3	0.3
Cost of debt	4.00%	4.90%

After-tax WACC	5.3%	7.2%


Selected WACC	6.2%

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 (6.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.