1721.HK WACC - Weighted Average Cost of Capital
The WACC of FSM Holdings Ltd (1721.HK) is 5.3%.
| Range | Selected | |
| Cost of equity | 4.3% - 6.6% | 5.45% |
| Tax rate | 17.8% - 20.3% | 19.05% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.2% - 6.4% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.25 | 0.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.3% | 6.6% |
| Tax rate | 17.8% | 20.3% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.2% | 6.4% |
| Selected WACC | 5.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1721.HK | FSM Holdings Ltd | 0.2 | -0.19 | -0.16 |
| 564.SI | Spindex Industries Ltd | 0.04 | 0.1 | 0.09 |
| 5FW.SI | Acesian Partners Ltd | 0.07 | -0.43 | -0.41 |
| AYV.SI | Acma Ltd | 1.04 | -0.67 | -0.36 |
| BJW.SI | Shinvest Holding Ltd | 0.05 | -0.44 | -0.42 |
| BLR.SI | Darco Water Technologies Ltd | 0.97 | 0.11 | 0.06 |
| C50.SI | Cheung Woh Technologies Ltd | 0.03 | 0.19 | 0.18 |
| F13.SI | Fu Yu Corporation Ltd | 0.09 | 0.61 | 0.56 |
| JLB.SI | Grand Venture Technology Ltd | 0.27 | 1.1 | 0.9 |
| M03.SI | Miyoshi Ltd | 1.82 | -0.18 | -0.07 |
| Low | High | |
| Unlevered beta | -0.11 | 0.07 |
| Relevered beta | -0.12 | 0.09 |
| Adjusted relevered beta | 0.25 | 0.39 |
1721.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 1721.HK:
cost_of_equity (5.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.25) + 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.