1496.HK WACC - Weighted Average Cost of Capital

The WACC of AP Rentals Holdings Ltd (1496.HK) is 8.2%.

The Cost of Equity of AP Rentals Holdings Ltd (1496.HK) is 9.25%.

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

	Range	Selected
Cost of equity	7.80% - 10.70%	9.25%
Tax rate	14.40% - 15.30%	14.85%
Cost of debt	5.00% - 6.00%	5.50%
WACC	7.0% - 9.4%	8.2%

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	0.83	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	10.70%

Tax rate	14.40%	15.30%
Debt/Equity ratio	0.33	0.33
Cost of debt	5.00%	6.00%

After-tax WACC	7.0%	9.4%


Selected WACC	8.2%

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 (9.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.