36.HK WACC - Weighted Average Cost of Capital

The WACC of Far East Holdings International Ltd (36.HK) is 12.1%.

The Cost of Equity of Far East Holdings International Ltd (36.HK) is 6.35%.

The Cost of Debt of Far East Holdings International Ltd (36.HK) is 13.45%.

	Range	Selected
Cost of equity	4.90% - 7.80%	6.35%
Tax rate	0.10% - 0.30%	0.20%
Cost of debt	4.00% - 22.90%	13.45%
WACC	4.2% - 20.0%	12.1%

WACC

36.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.34	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.90%	7.80%

Tax rate	0.10%	0.30%
Debt/Equity ratio	4.28	4.28
Cost of debt	4.00%	22.90%

After-tax WACC	4.2%	20.0%


Selected WACC	12.1%

36.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 36.HK:

cost_of_equity (6.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.34) + 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.