1310.HK WACC - Weighted Average Cost of Capital

The WACC of HKBN Ltd (1310.HK) is 7.6%.

The Cost of Equity of HKBN Ltd (1310.HK) is 7.90%.

The Cost of Debt of HKBN Ltd (1310.HK) is 9.85%.

	Range	Selected
Cost of equity	6.10% - 9.70%	7.90%
Tax rate	15.30% - 27.90%	21.60%
Cost of debt	5.10% - 14.60%	9.85%
WACC	5.0% - 10.2%	7.6%

WACC

1310.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.54	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	9.70%

Tax rate	15.30%	27.90%
Debt/Equity ratio	1.56	1.56
Cost of debt	5.10%	14.60%

After-tax WACC	5.0%	10.2%


Selected WACC	7.6%

1310.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 1310.HK:

cost_of_equity (7.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.