641.HK WACC - Weighted Average Cost of Capital

The WACC of CHTC Fong's International Co Ltd (641.HK) is 6.4%.

The Cost of Equity of CHTC Fong's International Co Ltd (641.HK) is 7.45%.

The Cost of Debt of CHTC Fong's International Co Ltd (641.HK) is 7.80%.

	Range	Selected
Cost of equity	5.80% - 9.10%	7.45%
Tax rate	8.60% - 27.50%	18.05%
Cost of debt	4.20% - 11.40%	7.80%
WACC	4.3% - 8.5%	6.4%

WACC

641.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	9.10%

Tax rate	8.60%	27.50%
Debt/Equity ratio	3.19	3.19
Cost of debt	4.20%	11.40%

After-tax WACC	4.3%	8.5%


Selected WACC	6.4%

641.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 641.HK:

cost_of_equity (7.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.