2217.HK WACC - Weighted Average Cost of Capital

The WACC of Tam Jai International Co Ltd (2217.HK) is 6.0%.

The Cost of Equity of Tam Jai International Co Ltd (2217.HK) is 7.00%.

The Cost of Debt of Tam Jai International Co Ltd (2217.HK) is 4.25%.

	Range	Selected
Cost of equity	6.10% - 7.90%	7.00%
Tax rate	18.80% - 20.10%	19.45%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.3% - 6.7%	6.0%

WACC

2217.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.53	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	7.90%

Tax rate	18.80%	20.10%
Debt/Equity ratio	0.38	0.38
Cost of debt	4.00%	4.50%

After-tax WACC	5.3%	6.7%


Selected WACC	6.0%

2217.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 2217.HK:

cost_of_equity (7.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.53) + 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.