3893.HK WACC - Weighted Average Cost of Capital

The WACC of CROSSTEC Group Holdings Ltd (3893.HK) is 7.5%.

The Cost of Equity of CROSSTEC Group Holdings Ltd (3893.HK) is 13.70%.

The Cost of Debt of CROSSTEC Group Holdings Ltd (3893.HK) is 4.25%.

	Range	Selected
Cost of equity	10.30% - 17.10%	13.70%
Tax rate	-% - 0.10%	0.05%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.2% - 8.9%	7.5%

WACC

3893.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.24	1.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	17.10%

Tax rate	-%	0.10%
Debt/Equity ratio	1.88	1.88
Cost of debt	4.00%	4.50%

After-tax WACC	6.2%	8.9%


Selected WACC	7.5%

3893.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 3893.HK:

cost_of_equity (13.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.24) + 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.