2590.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Geekplus Technology Co Ltd (2590.HK) is 11.7%.

The Cost of Equity of Beijing Geekplus Technology Co Ltd (2590.HK) is 11.90%.

The Cost of Debt of Beijing Geekplus Technology Co Ltd (2590.HK) is 5.50%.

	Range	Selected
Cost of equity	10.20% - 13.60%	11.90%
Tax rate	0.40% - 0.50%	0.45%
Cost of debt	4.00% - 7.00%	5.50%
WACC	10.0% - 13.4%	11.7%

WACC

2590.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.23	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	13.60%

Tax rate	0.40%	0.50%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	7.00%

After-tax WACC	10.0%	13.4%


Selected WACC	11.7%

2590.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 2590.HK:

cost_of_equity (11.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.23) + 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.