1848.HK WACC - Weighted Average Cost of Capital

The WACC of China Aircraft Leasing Group Holdings Ltd (1848.HK) is 8.6%.

The Cost of Equity of China Aircraft Leasing Group Holdings Ltd (1848.HK) is 14.25%.

The Cost of Debt of China Aircraft Leasing Group Holdings Ltd (1848.HK) is 10.55%.

	Range	Selected
Cost of equity	7.10% - 21.40%	14.25%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	6.50% - 14.60%	10.55%
WACC	5.2% - 12.0%	8.6%

WACC

1848.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.71	2.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	21.40%

Tax rate	22.10%	22.30%
Debt/Equity ratio	15.58	15.58
Cost of debt	6.50%	14.60%

After-tax WACC	5.2%	12.0%


Selected WACC	8.6%

1848.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 1848.HK:

cost_of_equity (14.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.71) + 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.