617.HK WACC - Weighted Average Cost of Capital

The WACC of Paliburg Holdings Ltd (617.HK) is 5.2%.

The Cost of Equity of Paliburg Holdings Ltd (617.HK) is 13.85%.

The Cost of Debt of Paliburg Holdings Ltd (617.HK) is 5.80%.

	Range	Selected
Cost of equity	11.10% - 16.60%	13.85%
Tax rate	2.20% - 19.30%	10.75%
Cost of debt	4.60% - 7.00%	5.80%
WACC	4.6% - 5.8%	5.2%

WACC

617.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.37	1.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	16.60%

Tax rate	2.20%	19.30%
Debt/Equity ratio	100.66	100.66
Cost of debt	4.60%	7.00%

After-tax WACC	4.6%	5.8%


Selected WACC	5.2%

617.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 617.HK:

cost_of_equity (13.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.37) + 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.