1608.HK WACC - Weighted Average Cost of Capital

The WACC of VPower Group International Holdings Ltd (1608.HK) is 12.0%.

The Cost of Equity of VPower Group International Holdings Ltd (1608.HK) is 10.95%.

The Cost of Debt of VPower Group International Holdings Ltd (1608.HK) is 14.50%.

	Range	Selected
Cost of equity	9.60% - 12.30%	10.95%
Tax rate	10.60% - 12.00%	11.30%
Cost of debt	6.10% - 22.90%	14.50%
WACC	7.2% - 16.8%	12.0%

WACC

1608.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.12	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	12.30%

Tax rate	10.60%	12.00%
Debt/Equity ratio	1.36	1.36
Cost of debt	6.10%	22.90%

After-tax WACC	7.2%	16.8%


Selected WACC	12.0%

1608.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 1608.HK:

cost_of_equity (10.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.12) + 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.