434.HK WACC - Weighted Average Cost of Capital

The WACC of Boyaa Interactive International Ltd (434.HK) is 7.0%.

The Cost of Equity of Boyaa Interactive International Ltd (434.HK) is 7.00%.

The Cost of Debt of Boyaa Interactive International Ltd (434.HK) is 13.80%.

	Range	Selected
Cost of equity	5.60% - 8.40%	7.00%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 23.60%	13.80%
WACC	5.6% - 8.5%	7.0%

WACC

434.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.46	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	8.40%

Tax rate	22.10%	22.30%
Debt/Equity ratio	0	0
Cost of debt	4.00%	23.60%

After-tax WACC	5.6%	8.5%


Selected WACC	7.0%

434.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 434.HK:

cost_of_equity (7.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.