142.HK WACC - Weighted Average Cost of Capital
The WACC of First Pacific Co Ltd (142.HK) is 5.6%.
| Range | Selected | |
| Cost of equity | 11.4% - 18.3% | 14.85% |
| Tax rate | 25.0% - 26.0% | 25.5% |
| Cost of debt | 4.3% - 4.5% | 4.4% |
| WACC | 4.9% - 6.4% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.42 | 2.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.4% | 18.3% |
| Tax rate | 25.0% | 26.0% |
| Debt/Equity ratio | 3.89 | 3.89 |
| Cost of debt | 4.3% | 4.5% |
| After-tax WACC | 4.9% | 6.4% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 142.HK | First Pacific Co Ltd | 4.2 | 0.14 | 0.03 |
| 1152.HK | Momentum Financial Holdings Ltd | 1.55 | 0.62 | 0.29 |
| 133.HK | China Merchants China Direct Investments Ltd | 0 | 0.79 | 0.79 |
| 175.HK | Geely Automobile Holdings Ltd | 0.04 | 1.05 | 1.02 |
| 179.HK | Johnson Electric Holdings Ltd | 0.35 | 0.74 | 0.58 |
| 2319.HK | China Mengniu Dairy Co Ltd | 0.52 | 1.29 | 0.93 |
| 310.HK | Prosperity Investment Holdings Ltd | 0.67 | 0.01 | 0.01 |
| E9L.SI | Joyas International Holdings Ltd | 1.12 | 1.65 | 0.9 |
| GOW.AX | Gowing Bros Ltd | 0.84 | 0.3 | 0.19 |
| OGC.VN | Ocean Group JSC | 1.12 | 0.93 | 0.51 |
| Low | High | |
| Unlevered beta | 0.42 | 0.67 |
| Relevered beta | 1.63 | 2.6 |
| Adjusted relevered beta | 1.42 | 2.07 |
142.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 142.HK:
cost_of_equity (14.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.42) + 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.