2500.HK WACC - Weighted Average Cost of Capital

The WACC of Venus Medtech Hangzhou Inc (2500.HK) is 11.4%.

The Cost of Equity of Venus Medtech Hangzhou Inc (2500.HK) is 10.85%.

The Cost of Debt of Venus Medtech Hangzhou Inc (2500.HK) is 13.30%.

	Range	Selected
Cost of equity	8.80% - 12.90%	10.85%
Tax rate	1.60% - 2.20%	1.90%
Cost of debt	7.00% - 19.60%	13.30%
WACC	8.3% - 14.5%	11.4%

WACC

2500.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	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	12.90%

Tax rate	1.60%	2.20%
Debt/Equity ratio	0.34	0.34
Cost of debt	7.00%	19.60%

After-tax WACC	8.3%	14.5%


Selected WACC	11.4%

2500.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 2500.HK:

cost_of_equity (10.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1) + 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.