2086.HK WACC - Weighted Average Cost of Capital

The WACC of HNA Technology Investments Holdings Ltd (2086.HK) is 7.7%.

The Cost of Equity of HNA Technology Investments Holdings Ltd (2086.HK) is 7.95%.

The Cost of Debt of HNA Technology Investments Holdings Ltd (2086.HK) is 4.85%.

	Range	Selected
Cost of equity	6.70% - 9.20%	7.95%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 5.70%	4.85%
WACC	6.5% - 9.0%	7.7%

WACC

2086.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.64	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.20%

Tax rate	22.10%	22.30%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	5.70%

After-tax WACC	6.5%	9.0%


Selected WACC	7.7%

2086.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 2086.HK:

cost_of_equity (7.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.