1789.HK WACC - Weighted Average Cost of Capital

The WACC of AK Medical Holdings Ltd (1789.HK) is 10.8%.

The Cost of Equity of AK Medical Holdings Ltd (1789.HK) is 10.95%.

The Cost of Debt of AK Medical Holdings Ltd (1789.HK) is 5.15%.

	Range	Selected
Cost of equity	9.40% - 12.50%	10.95%
Tax rate	14.70% - 15.50%	15.10%
Cost of debt	4.00% - 6.30%	5.15%
WACC	9.3% - 12.4%	10.8%

WACC

1789.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.09	1.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	12.50%

Tax rate	14.70%	15.50%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	6.30%

After-tax WACC	9.3%	12.4%


Selected WACC	10.8%

1789.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 1789.HK:

cost_of_equity (10.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.09) + 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.