1421.HK WACC - Weighted Average Cost of Capital

The WACC of Kingbostrike Ltd (1421.HK) is 7.6%.

The Cost of Equity of Kingbostrike Ltd (1421.HK) is 6.25%.

The Cost of Debt of Kingbostrike Ltd (1421.HK) is 25.35%.

	Range	Selected
Cost of equity	5.50% - 7.00%	6.25%
Tax rate	4.90% - 19.40%	12.15%
Cost of debt	7.00% - 43.70%	25.35%
WACC	5.6% - 9.7%	7.6%

WACC

1421.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.44	0.45

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	7.00%

Tax rate	4.90%	19.40%
Debt/Equity ratio	0.11	0.11
Cost of debt	7.00%	43.70%

After-tax WACC	5.6%	9.7%


Selected WACC	7.6%

1421.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 1421.HK:

cost_of_equity (6.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.