505.HK WACC - Weighted Average Cost of Capital

The WACC of Xingye Alloy Materials Group Ltd (505.HK) is 9.5%.

The Cost of Equity of Xingye Alloy Materials Group Ltd (505.HK) is 23.65%.

The Cost of Debt of Xingye Alloy Materials Group Ltd (505.HK) is 4.25%.

	Range	Selected
Cost of equity	21.20% - 26.10%	23.65%
Tax rate	18.60% - 20.80%	19.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.6% - 10.3%	9.5%

WACC

505.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	3.06	3.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.20%	26.10%

Tax rate	18.60%	20.80%
Debt/Equity ratio	2.33	2.33
Cost of debt	4.00%	4.50%

After-tax WACC	8.6%	10.3%


Selected WACC	9.5%

505.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 505.HK:

cost_of_equity (23.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (3.06) + 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.