1686.HK WACC - Weighted Average Cost of Capital

The WACC of Sunevision Holdings Ltd (1686.HK) is 8.6%.

The Cost of Equity of Sunevision Holdings Ltd (1686.HK) is 11.75%.

The Cost of Debt of Sunevision Holdings Ltd (1686.HK) is 6.05%.

	Range	Selected
Cost of equity	8.30% - 15.20%	11.75%
Tax rate	16.10% - 16.20%	16.15%
Cost of debt	4.00% - 8.10%	6.05%
WACC	6.0% - 11.3%	8.6%

WACC

1686.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	1.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	15.20%

Tax rate	16.10%	16.20%
Debt/Equity ratio	0.89	0.89
Cost of debt	4.00%	8.10%

After-tax WACC	6.0%	11.3%


Selected WACC	8.6%

1686.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 1686.HK:

cost_of_equity (11.75%) = 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.