1747.HK WACC - Weighted Average Cost of Capital

The WACC of Home Control International Ltd (1747.HK) is 8.8%.

The Cost of Equity of Home Control International Ltd (1747.HK) is 11.50%.

The Cost of Debt of Home Control International Ltd (1747.HK) is 4.25%.

	Range	Selected
Cost of equity	9.50% - 13.50%	11.50%
Tax rate	22.90% - 28.60%	25.75%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.4% - 10.1%	8.8%

WACC

1747.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.12	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	13.50%

Tax rate	22.90%	28.60%
Debt/Equity ratio	0.49	0.49
Cost of debt	4.00%	4.50%

After-tax WACC	7.4%	10.1%


Selected WACC	8.8%

1747.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 1747.HK:

cost_of_equity (11.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.12) + 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.