1883.HK WACC - Weighted Average Cost of Capital

The WACC of CITIC Telecom International Holdings Ltd (1883.HK) is 7.0%.

The Cost of Equity of CITIC Telecom International Holdings Ltd (1883.HK) is 8.70%.

The Cost of Debt of CITIC Telecom International Holdings Ltd (1883.HK) is 4.25%.

	Range	Selected
Cost of equity	7.00% - 10.40%	8.70%
Tax rate	17.40% - 17.90%	17.65%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.8% - 8.2%	7.0%

WACC

1883.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.68	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	10.40%

Tax rate	17.40%	17.90%
Debt/Equity ratio	0.48	0.48
Cost of debt	4.00%	4.50%

After-tax WACC	5.8%	8.2%


Selected WACC	7.0%

1883.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 1883.HK:

cost_of_equity (8.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.68) + 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.