1866.HK
China Xlx Fertiliser Ltd
Price:  
6.06 
HKD
Volume:  
6,702,000
China | Chemicals

1866.HK WACC - Weighted Average Cost of Capital

The WACC of China Xlx Fertiliser Ltd (1866.HK) is 7.2%.

The Cost of Equity of China Xlx Fertiliser Ltd (1866.HK) is 13.65%.
The Cost of Debt of China Xlx Fertiliser Ltd (1866.HK) is 4.6%.

RangeSelected
Cost of equity11.1% - 16.2%13.65%
Tax rate16.4% - 17.0%16.7%
Cost of debt4.3% - 4.9%4.6%
WACC6.2% - 8.2%7.2%
WACC

1866.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta1.371.77
Additional risk adjustments0.0%0.5%
Cost of equity11.1%16.2%
Tax rate16.4%17.0%
Debt/Equity ratio
1.951.95
Cost of debt4.3%4.9%
After-tax WACC6.2%8.2%
Selected WACC7.2%

1866.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 1866.HK:

cost_of_equity (13.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.37) + 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.