1958.HK WACC - Weighted Average Cost of Capital
The WACC of BAIC Motor Corp Ltd (1958.HK) is 8.2%.
| Range | Selected | |
| Cost of equity | 9.6% - 13.6% | 11.6% |
| Tax rate | 34.6% - 35.7% | 35.15% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 7.0% - 9.5% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.13 | 1.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.6% | 13.6% |
| Tax rate | 34.6% | 35.7% |
| Debt/Equity ratio | 0.61 | 0.61 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 7.0% | 9.5% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1958.HK | BAIC Motor Corp Ltd | 0.61 | 0.92 | 0.66 |
| 000625.SZ | Chongqing Changan Automobile Co Ltd | 0.29 | 1.12 | 0.94 |
| 000980.SZ | Zotye Automobile Co Ltd | 0.2 | 2.09 | 1.86 |
| 300825.SZ | IAT Automobile Technology Co Ltd | 0.12 | 1.52 | 1.41 |
| 489.HK | Dongfeng Motor Group Co Ltd | 3.76 | 1.08 | 0.31 |
| 600418.SS | Anhui Jianghuai Automobile Group Corp Ltd | 0.23 | 0.55 | 0.48 |
| 600609.SS | Shenyang Jinbei Automotive Co Ltd | 0.03 | 1.65 | 1.62 |
| 601238.SS | Guangzhou Automobile Group Co Ltd | 0.73 | 1.1 | 0.74 |
| 601633.SS | Great Wall Motor Co Ltd | 0.31 | 1.11 | 0.92 |
| M&M.NS | Mahindra and Mahindra Ltd | 0.29 | 1.69 | 1.43 |
| Low | High | |
| Unlevered beta | 0.85 | 1.13 |
| Relevered beta | 1.19 | 1.58 |
| Adjusted relevered beta | 1.13 | 1.39 |
1958.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 1958.HK:
cost_of_equity (11.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.13) + 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.