268.HK WACC - Weighted Average Cost of Capital

The WACC of Kingdee International Software Group Co Ltd (268.HK) is 11.7%.

The Cost of Equity of Kingdee International Software Group Co Ltd (268.HK) is 11.70%.

The Cost of Debt of Kingdee International Software Group Co Ltd (268.HK) is 5.50%.

	Range	Selected
Cost of equity	10.40% - 13.00%	11.70%
Tax rate	10.60% - 11.00%	10.80%
Cost of debt	4.00% - 7.00%	5.50%
WACC	10.4% - 13.0%	11.7%

WACC

268.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.27	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	13.00%

Tax rate	10.60%	11.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	7.00%

After-tax WACC	10.4%	13.0%


Selected WACC	11.7%

268.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 268.HK:

cost_of_equity (11.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.27) + 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.