968.HK WACC - Weighted Average Cost of Capital

The WACC of Xinyi Solar Holdings Ltd (968.HK) is 10.5%.

The Cost of Equity of Xinyi Solar Holdings Ltd (968.HK) is 13.80%.

The Cost of Debt of Xinyi Solar Holdings Ltd (968.HK) is 4.25%.

	Range	Selected
Cost of equity	11.90% - 15.70%	13.80%
Tax rate	15.40% - 15.80%	15.60%
Cost of debt	4.00% - 4.50%	4.25%
WACC	9.2% - 11.9%	10.5%

WACC

968.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.51	1.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.90%	15.70%

Tax rate	15.40%	15.80%
Debt/Equity ratio	0.47	0.47
Cost of debt	4.00%	4.50%

After-tax WACC	9.2%	11.9%


Selected WACC	10.5%

968.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 968.HK:

cost_of_equity (13.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.51) + 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.