434.HK WACC - Weighted Average Cost of Capital

The WACC of Boyaa Interactive International Ltd (434.HK) is 6.9%.

The Cost of Equity of Boyaa Interactive International Ltd (434.HK) is 6.90%.

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

	Range	Selected
Cost of equity	5.30% - 8.50%	6.90%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 23.60%	13.80%
WACC	5.3% - 8.5%	6.9%

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	0.33	0.59

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.30%	8.50%

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

After-tax WACC	5.3%	8.5%


Selected WACC	6.9%

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 (6.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.