1916.HK WACC - Weighted Average Cost of Capital

The WACC of Jiangxi Bank Co Ltd (1916.HK) is 4.9%.

The Cost of Equity of Jiangxi Bank Co Ltd (1916.HK) is 20.30%.

The Cost of Debt of Jiangxi Bank Co Ltd (1916.HK) is 5.00%.

	Range	Selected
Cost of equity	16.70% - 23.90%	20.30%
Tax rate	11.80% - 18.60%	15.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	4.9% - 4.8%	4.9%

WACC

1916.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.32	2.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	23.90%

Tax rate	11.80%	18.60%
Debt/Equity ratio	25.02	25.02
Cost of debt	5.00%	5.00%

After-tax WACC	4.9%	4.8%


Selected WACC	4.9%

1916.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 1916.HK:

cost_of_equity (20.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.32) + 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.