2343.HK WACC - Weighted Average Cost of Capital

The WACC of Pacific Basin Shipping Ltd (2343.HK) is 6.1%.

The Cost of Equity of Pacific Basin Shipping Ltd (2343.HK) is 6.45%.

The Cost of Debt of Pacific Basin Shipping Ltd (2343.HK) is 4.30%.

	Range	Selected
Cost of equity	5.00% - 7.90%	6.45%
Tax rate	0.20% - 0.40%	0.30%
Cost of debt	4.10% - 4.50%	4.30%
WACC	4.8% - 7.3%	6.1%

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	0.36	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.00%	7.90%

Tax rate	0.20%	0.40%
Debt/Equity ratio	0.21	0.21
Cost of debt	4.10%	4.50%

After-tax WACC	4.8%	7.3%


Selected WACC	6.1%

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 (6.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.