1005.HK WACC - Weighted Average Cost of Capital

The WACC of Matrix Holdings Ltd (1005.HK) is 6.1%.

The Cost of Equity of Matrix Holdings Ltd (1005.HK) is 6.20%.

The Cost of Debt of Matrix Holdings Ltd (1005.HK) is 6.65%.

	Range	Selected
Cost of equity	5.40% - 7.00%	6.20%
Tax rate	9.60% - 15.50%	12.55%
Cost of debt	6.30% - 7.00%	6.65%
WACC	5.5% - 6.8%	6.1%

WACC

1005.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.34	0.38

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.40%	7.00%

Tax rate	9.60%	15.50%
Debt/Equity ratio	0.17	0.17
Cost of debt	6.30%	7.00%

After-tax WACC	5.5%	6.8%


Selected WACC	6.1%

1005.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 1005.HK:

cost_of_equity (6.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.34) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.