459.HK WACC - Weighted Average Cost of Capital

The WACC of Midland Ic&I Ltd (459.HK) is 7.5%.

The Cost of Equity of Midland Ic&I Ltd (459.HK) is 16.50%.

The Cost of Debt of Midland Ic&I Ltd (459.HK) is 6.05%.

	Range	Selected
Cost of equity	14.00% - 19.00%	16.50%
Tax rate	18.60% - 37.30%	27.95%
Cost of debt	4.00% - 8.10%	6.05%
WACC	6.2% - 8.8%	7.5%

WACC

459.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.86	2.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	19.00%

Tax rate	18.60%	37.30%
Debt/Equity ratio	2.7	2.7
Cost of debt	4.00%	8.10%

After-tax WACC	6.2%	8.8%


Selected WACC	7.5%

459.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 459.HK:

cost_of_equity (16.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.86) + 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.