1968.HK WACC - Weighted Average Cost of Capital

The WACC of Hingtex Holdings Ltd (1968.HK) is 8.2%.

The Cost of Equity of Hingtex Holdings Ltd (1968.HK) is 9.60%.

The Cost of Debt of Hingtex Holdings Ltd (1968.HK) is 5.50%.

	Range	Selected
Cost of equity	8.00% - 11.20%	9.60%
Tax rate	3.80% - 6.00%	4.90%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.6% - 9.7%	8.2%

WACC

1968.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.86	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	11.20%

Tax rate	3.80%	6.00%
Debt/Equity ratio	0.49	0.49
Cost of debt	4.00%	7.00%

After-tax WACC	6.6%	9.7%


Selected WACC	8.2%

1968.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 1968.HK:

cost_of_equity (9.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.86) + 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.