1232.HK WACC - Weighted Average Cost of Capital

The WACC of Golden Wheel Tiandi Holdings Company Ltd (1232.HK) is 8.2%.

The Cost of Equity of Golden Wheel Tiandi Holdings Company Ltd (1232.HK) is 46.05%.

The Cost of Debt of Golden Wheel Tiandi Holdings Company Ltd (1232.HK) is 5.60%.

	Range	Selected
Cost of equity	17.90% - 74.20%	46.05%
Tax rate	6.80% - 8.50%	7.65%
Cost of debt	4.20% - 7.00%	5.60%
WACC	4.9% - 11.4%	8.2%

WACC

1232.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.51	10.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.90%	74.20%

Tax rate	6.80%	8.50%
Debt/Equity ratio	12.57	12.57
Cost of debt	4.20%	7.00%

After-tax WACC	4.9%	11.4%


Selected WACC	8.2%

1232.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 1232.HK:

cost_of_equity (46.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.51) + 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.