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 14.95%.

The Cost of Debt of First Pacific Co Ltd (142.HK) is 4.40%.

	Range	Selected
Cost of equity	12.00% - 17.90%	14.95%
Tax rate	25.00% - 26.00%	25.50%
Cost of debt	4.30% - 4.50%	4.40%
WACC	5.1% - 6.5%	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	1.53	2.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.00%	17.90%

Tax rate	25.00%	26.00%
Debt/Equity ratio	3.58	3.58
Cost of debt	4.30%	4.50%

After-tax WACC	5.1%	6.5%


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 (14.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.53) + 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.