1166.HK WACC - Weighted Average Cost of Capital

The WACC of Solartech International Holdings Ltd (1166.HK) is 7.0%.

The Cost of Equity of Solartech International Holdings Ltd (1166.HK) is 10.65%.

The Cost of Debt of Solartech International Holdings Ltd (1166.HK) is 7.20%.

	Range	Selected
Cost of equity	9.10% - 12.20%	10.65%
Tax rate	9.20% - 10.50%	9.85%
Cost of debt	7.00% - 7.40%	7.20%
WACC	6.7% - 7.3%	7.0%

WACC

1166.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.04	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	12.20%

Tax rate	9.20%	10.50%
Debt/Equity ratio	6.85	6.85
Cost of debt	7.00%	7.40%

After-tax WACC	6.7%	7.3%


Selected WACC	7.0%

1166.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 1166.HK:

cost_of_equity (10.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.04) + 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.