572.HK WACC - Weighted Average Cost of Capital

The WACC of Future World Holdings Ltd (572.HK) is 5.6%.

The Cost of Equity of Future World Holdings Ltd (572.HK) is 15.25%.

The Cost of Debt of Future World Holdings Ltd (572.HK) is 4.25%.

	Range	Selected
Cost of equity	12.60% - 17.90%	15.25%
Tax rate	10.80% - 19.50%	15.15%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.1% - 6.1%	5.6%

WACC

572.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.63	2.01

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	17.90%

Tax rate	10.80%	19.50%
Debt/Equity ratio	4.88	4.88
Cost of debt	4.00%	4.50%

After-tax WACC	5.1%	6.1%


Selected WACC	5.6%

572.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 572.HK:

cost_of_equity (15.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.63) + 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.