2166.HK WACC - Weighted Average Cost of Capital

The WACC of Smart-Core Holdings Ltd (2166.HK) is 8.8%.

The Cost of Equity of Smart-Core Holdings Ltd (2166.HK) is 10.30%.

The Cost of Debt of Smart-Core Holdings Ltd (2166.HK) is 5.85%.

	Range	Selected
Cost of equity	7.70% - 12.90%	10.30%
Tax rate	15.90% - 16.50%	16.20%
Cost of debt	5.70% - 6.00%	5.85%
WACC	6.9% - 10.7%	8.8%

WACC

2166.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.82	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	12.90%

Tax rate	15.90%	16.50%
Debt/Equity ratio	0.39	0.39
Cost of debt	5.70%	6.00%

After-tax WACC	6.9%	10.7%


Selected WACC	8.8%

2166.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 2166.HK:

cost_of_equity (10.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.82) + 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.