142.HK WACC - Weighted Average Cost of Capital

The WACC of First Pacific Co Ltd (142.HK) is 5.8%.

The Cost of Equity of First Pacific Co Ltd (142.HK) is 14.55%.

The Cost of Debt of First Pacific Co Ltd (142.HK) is 4.55%.

	Range	Selected
Cost of equity	10.80% - 18.30%	14.55%
Tax rate	25.00% - 26.00%	25.50%
Cost of debt	4.50% - 4.60%	4.55%
WACC	5.0% - 6.6%	5.8%

WACC

142.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.33	2.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	18.30%

Tax rate	25.00%	26.00%
Debt/Equity ratio	3.72	3.72
Cost of debt	4.50%	4.60%

After-tax WACC	5.0%	6.6%


Selected WACC	5.8%

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 (14.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.33) + 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.