1950.HK
Sunlight Technology Holdings Ltd
Price:  
0.27 
HKD
Volume:  
2,328,000.00
China | Chemicals
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1950.HK WACC - Weighted Average Cost of Capital

The WACC of Sunlight Technology Holdings Ltd (1950.HK) is 8.9%.

The Cost of Equity of Sunlight Technology Holdings Ltd (1950.HK) is 10.85%.
The Cost of Debt of Sunlight Technology Holdings Ltd (1950.HK) is 4.25%.

Range Selected
Cost of equity 9.00% - 12.70% 10.85%
Tax rate 24.30% - 32.80% 28.55%
Cost of debt 4.00% - 4.50% 4.25%
WACC 7.5% - 10.3% 8.9%
WACC

1950.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.03 1.27
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.00% 12.70%
Tax rate 24.30% 32.80%
Debt/Equity ratio 0.34 0.34
Cost of debt 4.00% 4.50%
After-tax WACC 7.5% 10.3%
Selected WACC 8.9%

1950.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 1950.HK:

cost_of_equity (10.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.03) + 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.