596.HK WACC - Weighted Average Cost of Capital

The WACC of Inspur International Ltd (596.HK) is 9.2%.

The Cost of Equity of Inspur International Ltd (596.HK) is 9.30%.

The Cost of Debt of Inspur International Ltd (596.HK) is 8.05%.

	Range	Selected
Cost of equity	7.80% - 10.80%	9.30%
Tax rate	14.30% - 16.80%	15.55%
Cost of debt	4.00% - 12.10%	8.05%
WACC	7.7% - 10.7%	9.2%

WACC

596.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.82	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	10.80%

Tax rate	14.30%	16.80%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	12.10%

After-tax WACC	7.7%	10.7%


Selected WACC	9.2%

596.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 596.HK:

cost_of_equity (9.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.82) + 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.