98.HK WACC - Weighted Average Cost of Capital

The WACC of Xingfa Aluminium Holdings Ltd (98.HK) is 10.9%.

The Cost of Equity of Xingfa Aluminium Holdings Ltd (98.HK) is 17.85%.

The Cost of Debt of Xingfa Aluminium Holdings Ltd (98.HK) is 6.05%.

	Range	Selected
Cost of equity	16.00% - 19.70%	17.85%
Tax rate	13.30% - 14.60%	13.95%
Cost of debt	4.00% - 8.10%	6.05%
WACC	9.1% - 12.7%	10.9%

WACC

98.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.19	2.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.00%	19.70%

Tax rate	13.30%	14.60%
Debt/Equity ratio	1.23	1.23
Cost of debt	4.00%	8.10%

After-tax WACC	9.1%	12.7%


Selected WACC	10.9%

98.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 98.HK:

cost_of_equity (17.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.19) + 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.