3360.HK WACC - Weighted Average Cost of Capital

The WACC of Far East Horizon Ltd (3360.HK) is 7.8%.

The Cost of Equity of Far East Horizon Ltd (3360.HK) is 9.90%.

The Cost of Debt of Far East Horizon Ltd (3360.HK) is 12.05%.

	Range	Selected
Cost of equity	6.30% - 13.50%	9.90%
Tax rate	35.10% - 36.70%	35.90%
Cost of debt	4.20% - 19.90%	12.05%
WACC	3.0% - 12.6%	7.8%

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	0.58	1.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	13.50%

Tax rate	35.10%	36.70%
Debt/Equity ratio	11.47	11.47
Cost of debt	4.20%	19.90%

After-tax WACC	3.0%	12.6%


Selected WACC	7.8%

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 (9.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.58) + 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.