2343.HK WACC - Weighted Average Cost of Capital

The WACC of Pacific Basin Shipping Ltd (2343.HK) is 7.7%.

The Cost of Equity of Pacific Basin Shipping Ltd (2343.HK) is 8.55%.

The Cost of Debt of Pacific Basin Shipping Ltd (2343.HK) is 4.25%.

	Range	Selected
Cost of equity	6.90% - 10.20%	8.55%
Tax rate	0.20% - 0.40%	0.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.4% - 9.1%	7.7%

WACC

2343.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.68	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	10.20%

Tax rate	0.20%	0.40%
Debt/Equity ratio	0.25	0.25
Cost of debt	4.00%	4.50%

After-tax WACC	6.4%	9.1%


Selected WACC	7.7%

2343.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 2343.HK:

cost_of_equity (8.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.68) + 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.