3360.HK WACC - Weighted Average Cost of Capital

The WACC of Far East Horizon Ltd (3360.HK) is 7.2%.

The Cost of Equity of Far East Horizon Ltd (3360.HK) is 7.15%.

The Cost of Debt of Far East Horizon Ltd (3360.HK) is 11.95%.

	Range	Selected
Cost of equity	5.60% - 8.70%	7.15%
Tax rate	37.10% - 40.10%	38.60%
Cost of debt	4.00% - 19.90%	11.95%
WACC	2.8% - 11.6%	7.2%

WACC

3360.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.46	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	8.70%

Tax rate	37.10%	40.10%
Debt/Equity ratio	8.91	8.91
Cost of debt	4.00%	19.90%

After-tax WACC	2.8%	11.6%


Selected WACC	7.2%

3360.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 3360.HK:

cost_of_equity (7.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.