6118.HK WACC - Weighted Average Cost of Capital

The WACC of Austar Lifesciences Ltd (6118.HK) is 7.2%.

The Cost of Equity of Austar Lifesciences Ltd (6118.HK) is 10.40%.

The Cost of Debt of Austar Lifesciences Ltd (6118.HK) is 5.65%.

	Range	Selected
Cost of equity	7.80% - 13.00%	10.40%
Tax rate	15.30% - 19.00%	17.15%
Cost of debt	5.30% - 6.00%	5.65%
WACC	5.9% - 8.4%	7.2%

WACC

6118.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.83	1.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	13.00%

Tax rate	15.30%	19.00%
Debt/Equity ratio	1.31	1.31
Cost of debt	5.30%	6.00%

After-tax WACC	5.9%	8.4%


Selected WACC	7.2%

6118.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 6118.HK:

cost_of_equity (10.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.