6600.HK WACC - Weighted Average Cost of Capital

The WACC of SciClone Pharmaceuticals (Holdings) Ltd (6600.HK) is 8.8%.

The Cost of Equity of SciClone Pharmaceuticals (Holdings) Ltd (6600.HK) is 8.75%.

The Cost of Debt of SciClone Pharmaceuticals (Holdings) Ltd (6600.HK) is 13.95%.

	Range	Selected
Cost of equity	6.80% - 10.70%	8.75%
Tax rate	7.80% - 8.30%	8.05%
Cost of debt	4.00% - 23.90%	13.95%
WACC	6.8% - 10.8%	8.8%

WACC

6600.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.66	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	10.70%

Tax rate	7.80%	8.30%
Debt/Equity ratio	0	0
Cost of debt	4.00%	23.90%

After-tax WACC	6.8%	10.8%


Selected WACC	8.8%

6600.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 6600.HK:

cost_of_equity (8.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.66) + 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.