2038.HK WACC - Weighted Average Cost of Capital

The WACC of FIH Mobile Ltd (2038.HK) is 11.3%.

The Cost of Equity of FIH Mobile Ltd (2038.HK) is 14.85%.

The Cost of Debt of FIH Mobile Ltd (2038.HK) is 9.30%.

	Range	Selected
Cost of equity	13.00% - 16.70%	14.85%
Tax rate	20.30% - 20.90%	20.60%
Cost of debt	4.00% - 14.60%	9.30%
WACC	8.4% - 14.3%	11.3%

WACC

2038.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.69	1.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.00%	16.70%

Tax rate	20.30%	20.90%
Debt/Equity ratio	0.88	0.88
Cost of debt	4.00%	14.60%

After-tax WACC	8.4%	14.3%


Selected WACC	11.3%

2038.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 2038.HK:

cost_of_equity (14.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.69) + 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.