2131.HK WACC - Weighted Average Cost of Capital

The WACC of Netjoy Holdings Ltd (2131.HK) is 10.6%.

The Cost of Equity of Netjoy Holdings Ltd (2131.HK) is 17.80%.

The Cost of Debt of Netjoy Holdings Ltd (2131.HK) is 5.55%.

	Range	Selected
Cost of equity	15.10% - 20.50%	17.80%
Tax rate	10.10% - 12.10%	11.10%
Cost of debt	4.60% - 6.50%	5.55%
WACC	9.0% - 12.3%	10.6%

WACC

2131.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.05	2.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.10%	20.50%

Tax rate	10.10%	12.10%
Debt/Equity ratio	1.26	1.26
Cost of debt	4.60%	6.50%

After-tax WACC	9.0%	12.3%


Selected WACC	10.6%

2131.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 2131.HK:

cost_of_equity (17.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.05) + 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.