208.HK WACC - Weighted Average Cost of Capital

The WACC of Polytec Asset Holdings Ltd (208.HK) is 6.3%.

The Cost of Equity of Polytec Asset Holdings Ltd (208.HK) is 6.90%.

The Cost of Debt of Polytec Asset Holdings Ltd (208.HK) is 4.25%.

	Range	Selected
Cost of equity	5.60% - 8.20%	6.90%
Tax rate	3.10% - 5.10%	4.10%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.2% - 7.3%	6.3%

WACC

208.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.48	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	8.20%

Tax rate	3.10%	5.10%
Debt/Equity ratio	0.28	0.28
Cost of debt	4.00%	4.50%

After-tax WACC	5.2%	7.3%


Selected WACC	6.3%

208.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 208.HK:

cost_of_equity (6.90%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.48) + 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.