1022.HK WACC - Weighted Average Cost of Capital

The WACC of Feiyu Technology International Company Ltd (1022.HK) is 7.1%.

The Cost of Equity of Feiyu Technology International Company Ltd (1022.HK) is 7.50%.

The Cost of Debt of Feiyu Technology International Company Ltd (1022.HK) is 5.85%.

	Range	Selected
Cost of equity	5.80% - 9.20%	7.50%
Tax rate	3.90% - 4.60%	4.25%
Cost of debt	4.70% - 7.00%	5.85%
WACC	5.5% - 8.6%	7.1%

WACC

1022.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	9.20%

Tax rate	3.90%	4.60%
Debt/Equity ratio	0.31	0.31
Cost of debt	4.70%	7.00%

After-tax WACC	5.5%	8.6%


Selected WACC	7.1%

1022.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 1022.HK:

cost_of_equity (7.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.