The WACC of World-Link Logistics (Asia) Holding Ltd (6083.HK) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.00% - 12.10% | 9.05% |
| Tax rate | 13.00% - 14.80% | 13.90% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 5.2% - 9.6% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.52 | 1.18 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.00% | 12.10% |
| Tax rate | 13.00% | 14.80% |
| Debt/Equity ratio | 0.44 | 0.44 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 5.2% | 9.6% |
| Selected WACC | 7.4% | |
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 6083.HK:
cost_of_equity (9.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.52) + 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.