1576.HK WACC - Weighted Average Cost of Capital

The WACC of Qilu Expressway Co Ltd (1576.HK) is 6.7%.

The Cost of Equity of Qilu Expressway Co Ltd (1576.HK) is 19.15%.

The Cost of Debt of Qilu Expressway Co Ltd (1576.HK) is 4.30%.

	Range	Selected
Cost of equity	15.30% - 23.00%	19.15%
Tax rate	25.00% - 25.10%	25.05%
Cost of debt	4.00% - 4.60%	4.30%
WACC	5.7% - 7.8%	6.7%

WACC

1576.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.08	2.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.30%	23.00%

Tax rate	25.00%	25.10%
Debt/Equity ratio	3.52	3.52
Cost of debt	4.00%	4.60%

After-tax WACC	5.7%	7.8%


Selected WACC	6.7%

1576.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 1576.HK:

cost_of_equity (19.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.08) + 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.