248.HK WACC - Weighted Average Cost of Capital

The WACC of HKC International Holdings Ltd (248.HK) is 12.7%.

The Cost of Equity of HKC International Holdings Ltd (248.HK) is 8.45%.

The Cost of Debt of HKC International Holdings Ltd (248.HK) is 13.65%.

	Range	Selected
Cost of equity	6.60% - 10.30%	8.45%
Tax rate	0.10% - 0.50%	0.30%
Cost of debt	4.40% - 22.90%	13.65%
WACC	4.8% - 20.5%	12.7%

WACC

248.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.63	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	10.30%

Tax rate	0.10%	0.50%
Debt/Equity ratio	4.57	4.57
Cost of debt	4.40%	22.90%

After-tax WACC	4.8%	20.5%


Selected WACC	12.7%

248.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 248.HK:

cost_of_equity (8.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.63) + 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.