1723.HK WACC - Weighted Average Cost of Capital

The WACC of HK Asia Holdings Ltd (1723.HK) is 6.1%.

The Cost of Equity of HK Asia Holdings Ltd (1723.HK) is 6.10%.

The Cost of Debt of HK Asia Holdings Ltd (1723.HK) is 4.60%.

	Range	Selected
Cost of equity	4.70% - 7.50%	6.10%
Tax rate	13.80% - 15.00%	14.40%
Cost of debt	4.00% - 5.20%	4.60%
WACC	4.7% - 7.5%	6.1%

WACC

1723.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.31	0.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.70%	7.50%

Tax rate	13.80%	15.00%
Debt/Equity ratio	0	0
Cost of debt	4.00%	5.20%

After-tax WACC	4.7%	7.5%


Selected WACC	6.1%

1723.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 1723.HK:

cost_of_equity (6.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.31) + 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.