1576.HK WACC - Weighted Average Cost of Capital

The WACC of Qilu Expressway Co Ltd (1576.HK) is 6.0%.

The Cost of Equity of Qilu Expressway Co Ltd (1576.HK) is 13.75%.

The Cost of Debt of Qilu Expressway Co Ltd (1576.HK) is 4.25%.

	Range	Selected
Cost of equity	11.40% - 16.10%	13.75%
Tax rate	25.00% - 25.10%	25.05%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.2% - 6.7%	6.0%

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	1.42	1.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	16.10%

Tax rate	25.00%	25.10%
Debt/Equity ratio	2.78	2.78
Cost of debt	4.00%	4.50%

After-tax WACC	5.2%	6.7%


Selected WACC	6.0%

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 (13.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.42) + 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.