1651.HK
Precision Tsugami (China) Corporation Ltd
Price:  
21.60 
HKD
Volume:  
1,760,000.00
China | Machinery
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1651.HK WACC - Weighted Average Cost of Capital

The WACC of Precision Tsugami (China) Corporation Ltd (1651.HK) is 9.3%.

The Cost of Equity of Precision Tsugami (China) Corporation Ltd (1651.HK) is 9.35%.
The Cost of Debt of Precision Tsugami (China) Corporation Ltd (1651.HK) is 18.55%.

Range Selected
Cost of equity 8.30% - 10.40% 9.35%
Tax rate 31.20% - 31.30% 31.25%
Cost of debt 4.00% - 33.10% 18.55%
WACC 8.3% - 10.4% 9.3%
WACC

1651.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.91 0.93
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 10.40%
Tax rate 31.20% 31.30%
Debt/Equity ratio 0 0
Cost of debt 4.00% 33.10%
After-tax WACC 8.3% 10.4%
Selected WACC 9.3%

1651.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 1651.HK:

cost_of_equity (9.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.91) + 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.