The WACC of Feiyu Technology International Company Ltd (1022.HK) is 6.6%.
Range | Selected | |
Cost of equity | 5.2% - 8.5% | 6.85% |
Tax rate | 3.9% - 4.6% | 4.25% |
Cost of debt | 4.7% - 7.0% | 5.85% |
WACC | 5.1% - 8.2% | 6.6% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.3 | 0.59 |
Additional risk adjustments | 0.5% | 1.0% |
Cost of equity | 5.2% | 8.5% |
Tax rate | 3.9% | 4.6% |
Debt/Equity ratio | 0.21 | 0.21 |
Cost of debt | 4.7% | 7.0% |
After-tax WACC | 5.1% | 8.2% |
Selected WACC | 6.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
1022.HK | Feiyu Technology International Company Ltd | 0.21 | 1.37 | 1.14 |
002425.SZ | Kaiser China Culture Co Ltd | 0.04 | 0.05 | 0.05 |
1961.HK | Jiu Zun Digital Interactive Entertainment Group Holdings Ltd | 0.04 | -0.19 | -0.19 |
300235.SZ | Shenzhen Kingsun Science & Technology Co Ltd | 0 | 1.46 | 1.46 |
3798.HK | Homeland Interactive Technology Ltd | 0.01 | -0.19 | -0.18 |
434.HK | Boyaa Interactive International Ltd | 0 | -0.17 | -0.17 |
484.HK | Forgame Holdings Ltd | 0.02 | 0.96 | 0.94 |
6860.HK | FingerTango Inc | 0.04 | 0.17 | 0.17 |
6899.HK | Ourgame International Holdings Ltd | 0.32 | 0.72 | 0.55 |
797.HK | 7Road Holdings Ltd | 0.19 | -0.98 | -0.83 |
Low | High | |
Unlevered beta | -0.04 | 0.32 |
Relevered beta | -0.04 | 0.39 |
Adjusted relevered beta | 0.3 | 0.59 |
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 (6.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.3) + 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.