2698.HK
Weiqiao Textile Co Ltd
Price:  
3.49 
HKD
Volume:  
4,976,000.00
China | Textiles, Apparel & Luxury Goods
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2698.HK WACC - Weighted Average Cost of Capital

The WACC of Weiqiao Textile Co Ltd (2698.HK) is 7.4%.

The Cost of Equity of Weiqiao Textile Co Ltd (2698.HK) is 11.80%.
The Cost of Debt of Weiqiao Textile Co Ltd (2698.HK) is 6.05%.

Range Selected
Cost of equity 9.40% - 14.20% 11.80%
Tax rate 24.90% - 45.00% 34.95%
Cost of debt 5.10% - 7.00% 6.05%
WACC 6.3% - 8.5% 7.4%
WACC

2698.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.09 1.48
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.40% 14.20%
Tax rate 24.90% 45.00%
Debt/Equity ratio 1.24 1.24
Cost of debt 5.10% 7.00%
After-tax WACC 6.3% 8.5%
Selected WACC 7.4%

2698.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 2698.HK:

cost_of_equity (11.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.09) + 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.