3798.HK WACC - Weighted Average Cost of Capital

The WACC of Homeland Interactive Technology Ltd (3798.HK) is 10.2%.

The Cost of Equity of Homeland Interactive Technology Ltd (3798.HK) is 10.30%.

The Cost of Debt of Homeland Interactive Technology Ltd (3798.HK) is 6.55%.

	Range	Selected
Cost of equity	7.90% - 12.70%	10.30%
Tax rate	13.10% - 14.40%	13.75%
Cost of debt	6.10% - 7.00%	6.55%
WACC	7.8% - 12.6%	10.2%

WACC

3798.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.84	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	12.70%

Tax rate	13.10%	14.40%
Debt/Equity ratio	0.02	0.02
Cost of debt	6.10%	7.00%

After-tax WACC	7.8%	12.6%


Selected WACC	10.2%

3798.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 3798.HK:

cost_of_equity (10.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.84) + 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.