321.HK WACC - Weighted Average Cost of Capital

The WACC of Texwinca Holdings Ltd (321.HK) is 6.0%.

The Cost of Equity of Texwinca Holdings Ltd (321.HK) is 9.40%.

The Cost of Debt of Texwinca Holdings Ltd (321.HK) is 4.30%.

	Range	Selected
Cost of equity	6.70% - 12.10%	9.40%
Tax rate	15.90% - 24.20%	20.05%
Cost of debt	4.00% - 4.60%	4.30%
WACC	4.8% - 7.2%	6.0%

WACC

321.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.64	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	12.10%

Tax rate	15.90%	24.20%
Debt/Equity ratio	1.32	1.32
Cost of debt	4.00%	4.60%

After-tax WACC	4.8%	7.2%


Selected WACC	6.0%

321.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 321.HK:

cost_of_equity (9.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.