2111.HK WACC - Weighted Average Cost of Capital

The WACC of Best Pacific International Holdings Ltd (2111.HK) is 8.9%.

The Cost of Equity of Best Pacific International Holdings Ltd (2111.HK) is 12.85%.

The Cost of Debt of Best Pacific International Holdings Ltd (2111.HK) is 4.25%.

	Range	Selected
Cost of equity	10.80% - 14.90%	12.85%
Tax rate	11.30% - 12.00%	11.65%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.6% - 10.1%	8.9%

WACC

2111.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.32	1.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.80%	14.90%

Tax rate	11.30%	12.00%
Debt/Equity ratio	0.77	0.77
Cost of debt	4.00%	4.50%

After-tax WACC	7.6%	10.1%


Selected WACC	8.9%

2111.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 2111.HK:

cost_of_equity (12.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.32) + 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.