2153.HK
Tat Hong Equipment Service Co Ltd
Price:  
1.09 
HKD
Volume:  
30,000.00
China | N/A
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2153.HK WACC - Weighted Average Cost of Capital

The WACC of Tat Hong Equipment Service Co Ltd (2153.HK) is 7.4%.

The Cost of Equity of Tat Hong Equipment Service Co Ltd (2153.HK) is 9.60%.
The Cost of Debt of Tat Hong Equipment Service Co Ltd (2153.HK) is 5.85%.

Range Selected
Cost of equity 7.20% - 12.00% 9.60%
Tax rate 7.10% - 15.80% 11.45%
Cost of debt 4.70% - 7.00% 5.85%
WACC 5.8% - 8.9% 7.4%
WACC

2153.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.73 1.17
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 12.00%
Tax rate 7.10% 15.80%
Debt/Equity ratio 1.01 1.01
Cost of debt 4.70% 7.00%
After-tax WACC 5.8% 8.9%
Selected WACC 7.4%

2153.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 2153.HK:

cost_of_equity (9.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.73) + 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.