6161.HK WACC - Weighted Average Cost of Capital

The WACC of Target Insurance Holdings Ltd (6161.HK) is 6.6%.

The Cost of Equity of Target Insurance Holdings Ltd (6161.HK) is 8.30%.

The Cost of Debt of Target Insurance Holdings Ltd (6161.HK) is 5.00%.

	Range	Selected
Cost of equity	7.20% - 9.40%	8.30%
Tax rate	2.20% - 7.50%	4.85%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.1% - 7.2%	6.6%

WACC

6161.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.72	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	9.40%

Tax rate	2.20%	7.50%
Debt/Equity ratio	0.87	0.87
Cost of debt	5.00%	5.00%

After-tax WACC	6.1%	7.2%


Selected WACC	6.6%

6161.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 6161.HK:

cost_of_equity (8.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.72) + 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.