98.HK WACC - Weighted Average Cost of Capital

The WACC of Xingfa Aluminium Holdings Ltd (98.HK) is 9.1%.

The Cost of Equity of Xingfa Aluminium Holdings Ltd (98.HK) is 13.20%.

The Cost of Debt of Xingfa Aluminium Holdings Ltd (98.HK) is 5.90%.

	Range	Selected
Cost of equity	10.40% - 16.00%	13.20%
Tax rate	12.40% - 13.40%	12.90%
Cost of debt	4.00% - 7.80%	5.90%
WACC	6.9% - 11.3%	9.1%

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	1.25	1.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	16.00%

Tax rate	12.40%	13.40%
Debt/Equity ratio	1.04	1.04
Cost of debt	4.00%	7.80%

After-tax WACC	6.9%	11.3%


Selected WACC	9.1%

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 (13.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.25) + 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.