334.HK WACC - Weighted Average Cost of Capital
The WACC of China Display Optoelectronics Technology Holdings Ltd (334.HK) is 8.6%.
| Range | Selected | |
| Cost of equity | 7.0% - 10.4% | 8.7% |
| Tax rate | 15.5% - 26.0% | 20.75% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.9% - 10.4% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.69 | 0.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 10.4% |
| Tax rate | 15.5% | 26.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.9% | 10.4% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 334.HK | China Display Optoelectronics Technology Holdings Ltd | 0.01 | 1.31 | 1.3 |
| 1079.HK | Pine Technology Holdings Ltd | 0.07 | 1.24 | 1.18 |
| 1263.HK | Pc Partner Group Ltd | 0.32 | 1.1 | 0.89 |
| 164.HK | China Baoli Technologies Holdings Ltd | 1.17 | 0.97 | 0.51 |
| 2028.HK | Jolimark Holdings Ltd | 3.91 | -0.45 | -0.11 |
| 2086.HK | HNA Technology Investments Holdings Ltd | 0.05 | 0.97 | 0.93 |
| 2362.TW | Clevo Co | 1.24 | 1.04 | 0.54 |
| 6413.T | Riso Kagaku Corp | 0.01 | 0.99 | 0.98 |
| 8066.HK | Phoenitron Holdings Ltd | 0.36 | -0.61 | -0.48 |
| 8163.TW | Darfon Electronics Corp | 0.91 | 0.54 | 0.32 |
| Low | High | |
| Unlevered beta | 0.53 | 0.9 |
| Relevered beta | 0.54 | 0.91 |
| Adjusted relevered beta | 0.69 | 0.94 |
334.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 334.HK:
cost_of_equity (8.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.69) + 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.