6188.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Digital Telecom Co Ltd (6188.HK) is 8.0%.

The Cost of Equity of Beijing Digital Telecom Co Ltd (6188.HK) is 32.80%.

The Cost of Debt of Beijing Digital Telecom Co Ltd (6188.HK) is 6.50%.

	Range	Selected
Cost of equity	14.50% - 51.10%	32.80%
Tax rate	1.00% - 3.60%	2.30%
Cost of debt	6.00% - 7.00%	6.50%
WACC	6.5% - 9.6%	8.0%

WACC

6188.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.95	6.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	51.10%

Tax rate	1.00%	3.60%
Debt/Equity ratio	14.52	14.52
Cost of debt	6.00%	7.00%

After-tax WACC	6.5%	9.6%


Selected WACC	8.0%

6188.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 6188.HK:

cost_of_equity (32.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.95) + 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.