536.HK WACC - Weighted Average Cost of Capital

The WACC of Tradelink Electronic Commerce Ltd (536.HK) is 9.1%.

The Cost of Equity of Tradelink Electronic Commerce Ltd (536.HK) is 9.05%.

The Cost of Debt of Tradelink Electronic Commerce Ltd (536.HK) is 4.60%.

	Range	Selected
Cost of equity	7.00% - 11.10%	9.05%
Tax rate	10.60% - 11.50%	11.05%
Cost of debt	4.00% - 5.20%	4.60%
WACC	7.0% - 11.1%	9.1%

WACC

536.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.69	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	11.10%

Tax rate	10.60%	11.50%
Debt/Equity ratio	0	0
Cost of debt	4.00%	5.20%

After-tax WACC	7.0%	11.1%


Selected WACC	9.1%

536.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 536.HK:

cost_of_equity (9.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.69) + 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.