98.HK WACC - Weighted Average Cost of Capital

The WACC of Xingfa Aluminium Holdings Ltd (98.HK) is 11.4%.

The Cost of Equity of Xingfa Aluminium Holdings Ltd (98.HK) is 18.50%.

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

	Range	Selected
Cost of equity	16.50% - 20.50%	18.50%
Tax rate	12.40% - 13.40%	12.90%
Cost of debt	4.00% - 7.80%	5.90%
WACC	9.6% - 13.2%	11.4%

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	2.28	2.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.50%	20.50%

Tax rate	12.40%	13.40%
Debt/Equity ratio	1.13	1.13
Cost of debt	4.00%	7.80%

After-tax WACC	9.6%	13.2%


Selected WACC	11.4%

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 (18.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.28) + 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.