3688.HK
Top Spring International Holdings Ltd
Price:  
0.4 
HKD
Volume:  
51,500
Hong Kong | Real Estate Management & Development

3688.HK WACC - Weighted Average Cost of Capital

The WACC of Top Spring International Holdings Ltd (3688.HK) is 4.9%.

The Cost of Equity of Top Spring International Holdings Ltd (3688.HK) is 6.95%.
The Cost of Debt of Top Spring International Holdings Ltd (3688.HK) is 6.3%.

RangeSelected
Cost of equity5.7% - 8.2%6.95%
Tax rate10.0% - 37.0%23.5%
Cost of debt5.6% - 7.0%6.3%
WACC5.1% - 4.7%4.9%
WACC

3688.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.470.62
Additional risk adjustments0.0%0.5%
Cost of equity5.7%8.2%
Tax rate10.0%37.0%
Debt/Equity ratio
14.114.1
Cost of debt5.6%7.0%
After-tax WACC5.1%4.7%
Selected WACC4.9%

3688.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 3688.HK:

cost_of_equity (6.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.47) + 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.