285.HK WACC - Weighted Average Cost of Capital

The WACC of BYD Electronic International Co Ltd (285.HK) is 10.5%.

The Cost of Equity of BYD Electronic International Co Ltd (285.HK) is 11.65%.

The Cost of Debt of BYD Electronic International Co Ltd (285.HK) is 4.25%.

	Range	Selected
Cost of equity	10.00% - 13.30%	11.65%
Tax rate	8.50% - 10.20%	9.35%
Cost of debt	4.00% - 4.50%	4.25%
WACC	9.1% - 11.9%	10.5%

WACC

285.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.2	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	13.30%

Tax rate	8.50%	10.20%
Debt/Equity ratio	0.17	0.17
Cost of debt	4.00%	4.50%

After-tax WACC	9.1%	11.9%


Selected WACC	10.5%

285.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 285.HK:

cost_of_equity (11.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.2) + 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.