1585.HK WACC - Weighted Average Cost of Capital

The WACC of Yadea Group Holdings Ltd (1585.HK) is 8.9%.

The Cost of Equity of Yadea Group Holdings Ltd (1585.HK) is 9.05%.

The Cost of Debt of Yadea Group Holdings Ltd (1585.HK) is 4.25%.

	Range	Selected
Cost of equity	8.00% - 10.10%	9.05%
Tax rate	14.90% - 17.60%	16.25%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.9% - 9.9%	8.9%

WACC

1585.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.86	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	10.10%

Tax rate	14.90%	17.60%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	4.50%

After-tax WACC	7.9%	9.9%


Selected WACC	8.9%

1585.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 1585.HK:

cost_of_equity (9.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.86) + 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.