2668.HK WACC - Weighted Average Cost of Capital

The WACC of Pak Tak International Ltd (2668.HK) is 5.6%.

The Cost of Equity of Pak Tak International Ltd (2668.HK) is 6.30%.

The Cost of Debt of Pak Tak International Ltd (2668.HK) is 5.85%.

	Range	Selected
Cost of equity	5.20% - 7.40%	6.30%
Tax rate	9.80% - 24.10%	16.95%
Cost of debt	4.70% - 7.00%	5.85%
WACC	4.7% - 6.4%	5.6%

WACC

2668.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	7.40%

Tax rate	9.80%	24.10%
Debt/Equity ratio	0.86	0.86
Cost of debt	4.70%	7.00%

After-tax WACC	4.7%	6.4%


Selected WACC	5.6%

2668.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 2668.HK:

cost_of_equity (6.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.