1588.HK WACC - Weighted Average Cost of Capital

The WACC of Chanjet Information Technology Co Ltd (1588.HK) is 11.3%.

The Cost of Equity of Chanjet Information Technology Co Ltd (1588.HK) is 11.35%.

The Cost of Debt of Chanjet Information Technology Co Ltd (1588.HK) is 7.50%.

	Range	Selected
Cost of equity	9.40% - 13.30%	11.35%
Tax rate	3.20% - 13.30%	8.25%
Cost of debt	4.00% - 11.00%	7.50%
WACC	9.4% - 13.3%	11.3%

WACC

1588.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.09	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	13.30%

Tax rate	3.20%	13.30%
Debt/Equity ratio	0	0
Cost of debt	4.00%	11.00%

After-tax WACC	9.4%	13.3%


Selected WACC	11.3%

1588.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 1588.HK:

cost_of_equity (11.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.09) + 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.