2308.HK WACC - Weighted Average Cost of Capital

The WACC of EVOC Intelligent Technology Co Ltd (2308.HK) is 9.7%.

The Cost of Equity of EVOC Intelligent Technology Co Ltd (2308.HK) is 16.65%.

The Cost of Debt of EVOC Intelligent Technology Co Ltd (2308.HK) is 7.10%.

	Range	Selected
Cost of equity	14.40% - 18.90%	16.65%
Tax rate	16.00% - 19.40%	17.70%
Cost of debt	6.10% - 8.10%	7.10%
WACC	8.4% - 10.9%	9.7%

WACC

2308.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.93	2.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	18.90%

Tax rate	16.00%	19.40%
Debt/Equity ratio	1.81	1.81
Cost of debt	6.10%	8.10%

After-tax WACC	8.4%	10.9%


Selected WACC	9.7%

2308.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 2308.HK:

cost_of_equity (16.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.93) + 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.