613.HK WACC - Weighted Average Cost of Capital

The WACC of Planetree International Development Ltd (613.HK) is 5.3%.

The Cost of Equity of Planetree International Development Ltd (613.HK) is 5.70%.

The Cost of Debt of Planetree International Development Ltd (613.HK) is 5.60%.

	Range	Selected
Cost of equity	5.00% - 6.40%	5.70%
Tax rate	13.60% - 43.70%	28.65%
Cost of debt	4.20% - 7.00%	5.60%
WACC	4.7% - 5.9%	5.3%

WACC

613.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.35	0.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.00%	6.40%

Tax rate	13.60%	43.70%
Debt/Equity ratio	0.27	0.27
Cost of debt	4.20%	7.00%

After-tax WACC	4.7%	5.9%


Selected WACC	5.3%

613.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 613.HK:

cost_of_equity (5.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + 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.