496.HK WACC - Weighted Average Cost of Capital

The WACC of Kasen International Holdings Ltd (496.HK) is 7.3%.

The Cost of Equity of Kasen International Holdings Ltd (496.HK) is 13.55%.

The Cost of Debt of Kasen International Holdings Ltd (496.HK) is 5.70%.

	Range	Selected
Cost of equity	11.10% - 16.00%	13.55%
Tax rate	38.20% - 39.40%	38.80%
Cost of debt	5.10% - 6.30%	5.70%
WACC	6.2% - 8.4%	7.3%

WACC

496.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.38	1.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	16.00%

Tax rate	38.20%	39.40%
Debt/Equity ratio	1.64	1.64
Cost of debt	5.10%	6.30%

After-tax WACC	6.2%	8.4%


Selected WACC	7.3%

496.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 496.HK:

cost_of_equity (13.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.38) + 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.