1977.HK WACC - Weighted Average Cost of Capital

The WACC of Analogue Holdings Ltd (1977.HK) is 5.8%.

The Cost of Equity of Analogue Holdings Ltd (1977.HK) is 6.85%.

The Cost of Debt of Analogue Holdings Ltd (1977.HK) is 4.60%.

	Range	Selected
Cost of equity	5.40% - 8.30%	6.85%
Tax rate	14.70% - 19.00%	16.85%
Cost of debt	4.00% - 5.20%	4.60%
WACC	4.7% - 6.9%	5.8%

WACC

1977.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.43	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	8.30%

Tax rate	14.70%	19.00%
Debt/Equity ratio	0.52	0.52
Cost of debt	4.00%	5.20%

After-tax WACC	4.7%	6.9%


Selected WACC	5.8%

1977.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 1977.HK:

cost_of_equity (6.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.