423.HK WACC - Weighted Average Cost of Capital

The WACC of Hong Kong Economic Times Holdings Ltd (423.HK) is 8.4%.

The Cost of Equity of Hong Kong Economic Times Holdings Ltd (423.HK) is 8.45%.

The Cost of Debt of Hong Kong Economic Times Holdings Ltd (423.HK) is 6.30%.

	Range	Selected
Cost of equity	7.10% - 9.80%	8.45%
Tax rate	32.10% - 34.80%	33.45%
Cost of debt	5.60% - 7.00%	6.30%
WACC	7.1% - 9.7%	8.4%

WACC

423.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.7	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	9.80%

Tax rate	32.10%	34.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	5.60%	7.00%

After-tax WACC	7.1%	9.7%


Selected WACC	8.4%

423.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 423.HK:

cost_of_equity (8.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.7) + 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.