1070.HK WACC - Weighted Average Cost of Capital

The WACC of TCL Electronics Holdings Ltd (1070.HK) is 10.5%.

The Cost of Equity of TCL Electronics Holdings Ltd (1070.HK) is 11.10%.

The Cost of Debt of TCL Electronics Holdings Ltd (1070.HK) is 10.50%.

	Range	Selected
Cost of equity	9.50% - 12.70%	11.10%
Tax rate	20.50% - 27.10%	23.80%
Cost of debt	4.60% - 16.40%	10.50%
WACC	8.4% - 12.5%	10.5%

WACC

1070.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.1	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	12.70%

Tax rate	20.50%	27.10%
Debt/Equity ratio	0.23	0.23
Cost of debt	4.60%	16.40%

After-tax WACC	8.4%	12.5%


Selected WACC	10.5%

1070.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 1070.HK:

cost_of_equity (11.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.1) + 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.