6088.HK WACC - Weighted Average Cost of Capital

The WACC of Foxconn Interconnect Technology Ltd (6088.HK) is 8.0%.

The Cost of Equity of Foxconn Interconnect Technology Ltd (6088.HK) is 11.45%.

The Cost of Debt of Foxconn Interconnect Technology Ltd (6088.HK) is 5.25%.

	Range	Selected
Cost of equity	10.20% - 12.70%	11.45%
Tax rate	29.10% - 30.50%	29.80%
Cost of debt	4.00% - 6.50%	5.25%
WACC	6.9% - 9.0%	8.0%

WACC

6088.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.23	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	12.70%

Tax rate	29.10%	30.50%
Debt/Equity ratio	0.8	0.8
Cost of debt	4.00%	6.50%

After-tax WACC	6.9%	9.0%


Selected WACC	8.0%

6088.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 6088.HK:

cost_of_equity (11.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.23) + 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.