2003.HK
VCREDIT Holdings Ltd
Price:  
3.23 
HKD
Volume:  
166,800.00
China | Consumer Finance
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2003.HK WACC - Weighted Average Cost of Capital

The WACC of VCREDIT Holdings Ltd (2003.HK) is 7.5%.

The Cost of Equity of VCREDIT Holdings Ltd (2003.HK) is 14.35%.
The Cost of Debt of VCREDIT Holdings Ltd (2003.HK) is 7.30%.

Range Selected
Cost of equity 10.70% - 18.00% 14.35%
Tax rate 22.90% - 23.60% 23.25%
Cost of debt 6.50% - 8.10% 7.30%
WACC 6.2% - 8.8% 7.5%
WACC

2003.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.31 2.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.70% 18.00%
Tax rate 22.90% 23.60%
Debt/Equity ratio 3.58 3.58
Cost of debt 6.50% 8.10%
After-tax WACC 6.2% 8.8%
Selected WACC 7.5%

2003.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 2003.HK:

cost_of_equity (14.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.31) + 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.