1912.HK WACC - Weighted Average Cost of Capital

The WACC of Contel Technology Co Ltd (1912.HK) is 8.5%.

The Cost of Equity of Contel Technology Co Ltd (1912.HK) is 9.00%.

The Cost of Debt of Contel Technology Co Ltd (1912.HK) is 9.50%.

	Range	Selected
Cost of equity	5.60% - 12.40%	9.00%
Tax rate	12.40% - 15.60%	14.00%
Cost of debt	7.00% - 12.00%	9.50%
WACC	5.9% - 11.1%	8.5%

WACC

1912.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.46	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	12.40%

Tax rate	12.40%	15.60%
Debt/Equity ratio	1.33	1.33
Cost of debt	7.00%	12.00%

After-tax WACC	5.9%	11.1%


Selected WACC	8.5%

1912.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 1912.HK:

cost_of_equity (9.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.