303.HK WACC - Weighted Average Cost of Capital
The WACC of Vtech Holdings Ltd (303.HK) is 9.0%.
| Range | Selected | |
| Cost of equity | 6.9% - 12.0% | 9.45% |
| Tax rate | 11.4% - 12.0% | 11.7% |
| Cost of debt | 4.0% - 4.9% | 4.45% |
| WACC | 6.7% - 11.4% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.68 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 12.0% |
| Tax rate | 11.4% | 12.0% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 4.0% | 4.9% |
| After-tax WACC | 6.7% | 11.4% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 303.HK | Vtech Holdings Ltd | 0.08 | 0.52 | 0.48 |
| 000810.SZ | Skyworth Digital Co Ltd | 0.11 | 1.77 | 1.62 |
| 002583.SZ | Hytera Communications Corp Ltd | 0.11 | 1.61 | 1.46 |
| 1523.HK | Plover Bay Technologies Ltd | 0.01 | 0.49 | 0.49 |
| 1617.HK | Nanfang Communication Holdings Ltd | 2.07 | 0.8 | 0.28 |
| 2342.HK | Comba Telecom Systems Holdings Ltd | 0.17 | 1.13 | 0.99 |
| 2345.TW | Accton Technology Corp | 0.01 | 1.4 | 1.39 |
| 300136.SZ | Shenzhen Sunway Communication Co Ltd | 0.18 | 1.79 | 1.55 |
| 482.HK | Sandmartin International Holdings Ltd | 3.85 | -0.33 | -0.08 |
| 8043.HK | Atlinks Group Ltd | 2.17 | 0.19 | 0.06 |
| Low | High | |
| Unlevered beta | 0.48 | 1.15 |
| Relevered beta | 0.52 | 1.24 |
| Adjusted relevered beta | 0.68 | 1.16 |
303.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 303.HK:
cost_of_equity (9.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.68) + 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.