1173.HK WACC - Weighted Average Cost of Capital

The WACC of Veeko International Holdings Ltd (1173.HK) is 6.8%.

The Cost of Equity of Veeko International Holdings Ltd (1173.HK) is 20.45%.

The Cost of Debt of Veeko International Holdings Ltd (1173.HK) is 5.50%.

	Range	Selected
Cost of equity	15.80% - 25.10%	20.45%
Tax rate	2.60% - 3.60%	3.10%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.1% - 8.6%	6.8%

WACC

1173.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.16	3.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.80%	25.10%

Tax rate	2.60%	3.60%
Debt/Equity ratio	9	9
Cost of debt	4.00%	7.00%

After-tax WACC	5.1%	8.6%


Selected WACC	6.8%

1173.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 1173.HK:

cost_of_equity (20.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.16) + 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.