173.HK WACC - Weighted Average Cost of Capital

The WACC of K. Wah International Holdings Ltd (173.HK) is 5.7%.

The Cost of Equity of K. Wah International Holdings Ltd (173.HK) is 7.60%.

The Cost of Debt of K. Wah International Holdings Ltd (173.HK) is 7.70%.

	Range	Selected
Cost of equity	6.30% - 8.90%	7.60%
Tax rate	32.30% - 36.80%	34.55%
Cost of debt	4.00% - 11.40%	7.70%
WACC	3.7% - 7.6%	5.7%

WACC

173.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.58	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	8.90%

Tax rate	32.30%	36.80%
Debt/Equity ratio	2.66	2.66
Cost of debt	4.00%	11.40%

After-tax WACC	3.7%	7.6%


Selected WACC	5.7%

173.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 173.HK:

cost_of_equity (7.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.58) + 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.