665.HK WACC - Weighted Average Cost of Capital

The WACC of Haitong International Securities Group Ltd (665.HK) is 6.2%.

The Cost of Equity of Haitong International Securities Group Ltd (665.HK) is 12.90%.

The Cost of Debt of Haitong International Securities Group Ltd (665.HK) is 5.50%.

	Range	Selected
Cost of equity	9.90% - 15.90%	12.90%
Tax rate	14.90% - 16.10%	15.50%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.7% - 7.8%	6.2%

WACC

665.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.18	1.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	15.90%

Tax rate	14.90%	16.10%
Debt/Equity ratio	4.23	4.23
Cost of debt	4.00%	7.00%

After-tax WACC	4.7%	7.8%


Selected WACC	6.2%

665.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 665.HK:

cost_of_equity (12.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.18) + 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.