214.HK WACC - Weighted Average Cost of Capital

The WACC of Asia Orient Holdings Ltd (214.HK) is 6.3%.

The Cost of Equity of Asia Orient Holdings Ltd (214.HK) is 7.75%.

The Cost of Debt of Asia Orient Holdings Ltd (214.HK) is 6.55%.

	Range	Selected
Cost of equity	6.60% - 8.90%	7.75%
Tax rate	2.60% - 5.10%	3.85%
Cost of debt	5.00% - 8.10%	6.55%
WACC	4.9% - 7.7%	6.3%

WACC

214.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.62	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	8.90%

Tax rate	2.60%	5.10%
Debt/Equity ratio	82.72	82.72
Cost of debt	5.00%	8.10%

After-tax WACC	4.9%	7.7%


Selected WACC	6.3%

214.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 214.HK:

cost_of_equity (7.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.62) + 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.