505.HK WACC - Weighted Average Cost of Capital

The WACC of Xingye Alloy Materials Group Ltd (505.HK) is 7.8%.

The Cost of Equity of Xingye Alloy Materials Group Ltd (505.HK) is 14.90%.

The Cost of Debt of Xingye Alloy Materials Group Ltd (505.HK) is 4.25%.

	Range	Selected
Cost of equity	11.80% - 18.00%	14.90%
Tax rate	15.00% - 18.30%	16.65%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.5% - 9.1%	7.8%

WACC

505.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.49	2.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	18.00%

Tax rate	15.00%	18.30%
Debt/Equity ratio	1.65	1.65
Cost of debt	4.00%	4.50%

After-tax WACC	6.5%	9.1%


Selected WACC	7.8%

505.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 505.HK:

cost_of_equity (14.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.49) + 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.