1401.HK WACC - Weighted Average Cost of Capital

The WACC of Sprocomm Intelligence Ltd (1401.HK) is 10.2%.

The Cost of Equity of Sprocomm Intelligence Ltd (1401.HK) is 9.45%.

The Cost of Debt of Sprocomm Intelligence Ltd (1401.HK) is 20.35%.

	Range	Selected
Cost of equity	7.50% - 11.40%	9.45%
Tax rate	19.00% - 22.70%	20.85%
Cost of debt	17.80% - 22.90%	20.35%
WACC	8.3% - 12.1%	10.2%

WACC

1401.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.78	1.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	11.40%

Tax rate	19.00%	22.70%
Debt/Equity ratio	0.13	0.13
Cost of debt	17.80%	22.90%

After-tax WACC	8.3%	12.1%


Selected WACC	10.2%

1401.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 1401.HK:

cost_of_equity (9.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.78) + 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.