3663.HK WACC - Weighted Average Cost of Capital

The WACC of Xiezhong International Holdings Ltd (3663.HK) is 9.1%.

The Cost of Equity of Xiezhong International Holdings Ltd (3663.HK) is 13.25%.

The Cost of Debt of Xiezhong International Holdings Ltd (3663.HK) is 6.60%.

	Range	Selected
Cost of equity	11.50% - 15.00%	13.25%
Tax rate	3.00% - 4.60%	3.80%
Cost of debt	6.20% - 7.00%	6.60%
WACC	8.2% - 9.9%	9.1%

WACC

3663.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	1.59	1.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	15.00%

Tax rate	3.00%	4.60%
Debt/Equity ratio	1.54	1.54
Cost of debt	6.20%	7.00%

After-tax WACC	8.2%	9.9%


Selected WACC	9.1%

3663.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 3663.HK:

cost_of_equity (13.25%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (1.59) + 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.