711.HK WACC - Weighted Average Cost of Capital

The WACC of Asia Allied Infrastructure Holdings Ltd (711.HK) is 5.3%.

The Cost of Equity of Asia Allied Infrastructure Holdings Ltd (711.HK) is 6.90%.

The Cost of Debt of Asia Allied Infrastructure Holdings Ltd (711.HK) is 5.50%.

	Range	Selected
Cost of equity	5.30% - 8.50%	6.90%
Tax rate	10.80% - 11.90%	11.35%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.9% - 6.6%	5.3%

WACC

711.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.41	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	8.50%

Tax rate	10.80%	11.90%
Debt/Equity ratio	3.95	3.95
Cost of debt	4.00%	7.00%

After-tax WACC	3.9%	6.6%


Selected WACC	5.3%

711.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 711.HK:

cost_of_equity (6.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.