465.HK WACC - Weighted Average Cost of Capital

The WACC of Futong Technology Development Holdings Ltd (465.HK) is 6.7%.

The Cost of Equity of Futong Technology Development Holdings Ltd (465.HK) is 6.80%.

The Cost of Debt of Futong Technology Development Holdings Ltd (465.HK) is 5.75%.

	Range	Selected
Cost of equity	5.80% - 7.80%	6.80%
Tax rate	1.70% - 9.60%	5.65%
Cost of debt	4.50% - 7.00%	5.75%
WACC	5.7% - 7.7%	6.7%

WACC

465.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	7.80%

Tax rate	1.70%	9.60%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.50%	7.00%

After-tax WACC	5.7%	7.7%


Selected WACC	6.7%

465.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 465.HK:

cost_of_equity (6.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.