2488.HK WACC - Weighted Average Cost of Capital

The WACC of Launch Tech Co Ltd (2488.HK) is 9.3%.

The Cost of Equity of Launch Tech Co Ltd (2488.HK) is 10.90%.

The Cost of Debt of Launch Tech Co Ltd (2488.HK) is 5.00%.

	Range	Selected
Cost of equity	9.40% - 12.40%	10.90%
Tax rate	3.30% - 5.20%	4.25%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.2% - 10.4%	9.3%

WACC

2488.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	1.19	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	12.40%

Tax rate	3.30%	5.20%
Debt/Equity ratio	0.34	0.34
Cost of debt	5.00%	5.00%

After-tax WACC	8.2%	10.4%


Selected WACC	9.3%

2488.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 2488.HK:

cost_of_equity (10.90%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (1.19) + 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.