416.HK WACC - Weighted Average Cost of Capital

The WACC of Bank of Jinzhou Co Ltd (416.HK) is 4.1%.

The Cost of Equity of Bank of Jinzhou Co Ltd (416.HK) is 8.60%.

The Cost of Debt of Bank of Jinzhou Co Ltd (416.HK) is 5.00%.

	Range	Selected
Cost of equity	7.20% - 10.00%	8.60%
Tax rate	24.40% - 36.10%	30.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	4.2% - 4.0%	4.1%

WACC

416.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.72	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	10.00%

Tax rate	24.40%	36.10%
Debt/Equity ratio	7.47	7.47
Cost of debt	5.00%	5.00%

After-tax WACC	4.2%	4.0%


Selected WACC	4.1%

416.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 416.HK:

cost_of_equity (8.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.72) + 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.