173.HK WACC - Weighted Average Cost of Capital

The WACC of K. Wah International Holdings Ltd (173.HK) is 4.3%.

The Cost of Equity of K. Wah International Holdings Ltd (173.HK) is 6.50%.

The Cost of Debt of K. Wah International Holdings Ltd (173.HK) is 5.65%.

	Range	Selected
Cost of equity	5.50% - 7.50%	6.50%
Tax rate	39.00% - 45.20%	42.10%
Cost of debt	4.30% - 7.00%	5.65%
WACC	3.5% - 5.0%	4.3%

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	0.44	0.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	7.50%

Tax rate	39.00%	45.20%
Debt/Equity ratio	2.13	2.13
Cost of debt	4.30%	7.00%

After-tax WACC	3.5%	5.0%


Selected WACC	4.3%

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 (6.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.