1905.HK WACC - Weighted Average Cost of Capital

The WACC of Haitong Unitrust International Financial Leasing Co Ltd (1905.HK) is 7.0%.

The Cost of Equity of Haitong Unitrust International Financial Leasing Co Ltd (1905.HK) is 39.00%.

The Cost of Debt of Haitong Unitrust International Financial Leasing Co Ltd (1905.HK) is 6.05%.

	Range	Selected
Cost of equity	19.40% - 58.60%	39.00%
Tax rate	25.20% - 25.40%	25.30%
Cost of debt	4.00% - 8.10%	6.05%
WACC	4.2% - 9.8%	7.0%

WACC

1905.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.77	7.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.40%	58.60%

Tax rate	25.20%	25.40%
Debt/Equity ratio	13.05	13.05
Cost of debt	4.00%	8.10%

After-tax WACC	4.2%	9.8%


Selected WACC	7.0%

1905.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 1905.HK:

cost_of_equity (39.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.77) + 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.