1218.HK WACC - Weighted Average Cost of Capital

The WACC of Easyknit International Holdings Ltd (1218.HK) is 6.8%.

The Cost of Equity of Easyknit International Holdings Ltd (1218.HK) is 9.15%.

The Cost of Debt of Easyknit International Holdings Ltd (1218.HK) is 7.20%.

	Range	Selected
Cost of equity	6.20% - 12.10%	9.15%
Tax rate	3.80% - 9.60%	6.70%
Cost of debt	7.00% - 7.40%	7.20%
WACC	6.7% - 6.9%	6.8%

WACC

1218.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.56	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	12.10%

Tax rate	3.80%	9.60%
Debt/Equity ratio	24.08	24.08
Cost of debt	7.00%	7.40%

After-tax WACC	6.7%	6.9%


Selected WACC	6.8%

1218.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 1218.HK:

cost_of_equity (9.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.