1585.HK WACC - Weighted Average Cost of Capital

The WACC of Yadea Group Holdings Ltd (1585.HK) is 9.7%.

The Cost of Equity of Yadea Group Holdings Ltd (1585.HK) is 9.90%.

The Cost of Debt of Yadea Group Holdings Ltd (1585.HK) is 5.90%.

	Range	Selected
Cost of equity	7.90% - 11.90%	9.90%
Tax rate	14.90% - 17.60%	16.25%
Cost of debt	4.00% - 7.80%	5.90%
WACC	7.8% - 11.7%	9.7%

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	0.84	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	11.90%

Tax rate	14.90%	17.60%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	7.80%

After-tax WACC	7.8%	11.7%


Selected WACC	9.7%

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 (9.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.84) + 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.