1922.HK WACC - Weighted Average Cost of Capital

The WACC of Yincheng Life Service Co Ltd (1922.HK) is 8.7%.

The Cost of Equity of Yincheng Life Service Co Ltd (1922.HK) is 10.25%.

The Cost of Debt of Yincheng Life Service Co Ltd (1922.HK) is 5.90%.

	Range	Selected
Cost of equity	8.30% - 12.20%	10.25%
Tax rate	26.10% - 27.10%	26.60%
Cost of debt	4.00% - 7.80%	5.90%
WACC	6.9% - 10.5%	8.7%

WACC

1922.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.91	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	12.20%

Tax rate	26.10%	27.10%
Debt/Equity ratio	0.36	0.36
Cost of debt	4.00%	7.80%

After-tax WACC	6.9%	10.5%


Selected WACC	8.7%

1922.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 1922.HK:

cost_of_equity (10.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.91) + 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.