378.HK WACC - Weighted Average Cost of Capital

The WACC of FDG Kinetic Ltd (378.HK) is 6.6%.

The Cost of Equity of FDG Kinetic Ltd (378.HK) is 6.80%.

The Cost of Debt of FDG Kinetic Ltd (378.HK) is 6.50%.

	Range	Selected
Cost of equity	5.80% - 7.80%	6.80%
Tax rate	0.40% - 0.70%	0.55%
Cost of debt	6.00% - 7.00%	6.50%
WACC	5.9% - 7.2%	6.6%

WACC

378.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	7.80%

Tax rate	0.40%	0.70%
Debt/Equity ratio	2.68	2.68
Cost of debt	6.00%	7.00%

After-tax WACC	5.9%	7.2%


Selected WACC	6.6%

378.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 378.HK:

cost_of_equity (6.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.