6918.HK WACC - Weighted Average Cost of Capital
The WACC of Kidztech Holdings Ltd (6918.HK) is 9.6%.
| Range | Selected | |
| Cost of equity | 10.7% - 20.3% | 15.5% |
| Tax rate | 7.2% - 11.7% | 9.45% |
| Cost of debt | 7.0% - 8.0% | 7.5% |
| WACC | 7.9% - 11.4% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.31 | 2.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.7% | 20.3% |
| Tax rate | 7.2% | 11.7% |
| Debt/Equity ratio | 2.11 | 2.11 |
| Cost of debt | 7.0% | 8.0% |
| After-tax WACC | 7.9% | 11.4% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6918.HK | Kidztech Holdings Ltd | 2.11 | 0.76 | 0.26 |
| 000017.SZ | Shenzhen China Bicycle Company Holdings Ltd | 0.01 | 1.25 | 1.24 |
| 002575.SZ | Guangdong Qunxing Toys Joint Stock Co Ltd | 0 | 0.64 | 0.64 |
| 002862.SZ | Shifeng Cultural Development Co Ltd | 0.09 | 0.96 | 0.88 |
| 1237.HK | China Environmental Technology and Bioenergy Holdings Ltd | 2.69 | 1.01 | 0.29 |
| 300329.SZ | Hailun Piano Co Ltd | 0.18 | 1.84 | 1.57 |
| 600818.SS | Zhonglu Co Ltd | 0.01 | 1.39 | 1.38 |
| 603129.SS | Zhejiang CFMoto Power Co Ltd | 0.15 | 0.33 | 0.29 |
| 603908.SS | Comefly Outdoor Co Ltd | 0.1 | 1.4 | 1.28 |
| N0Z.SI | Combine Will International Holdings Ltd | 2.79 | 0.09 | 0.02 |
| Low | High | |
| Unlevered beta | 0.5 | 1.03 |
| Relevered beta | 1.46 | 3.03 |
| Adjusted relevered beta | 1.31 | 2.36 |
6918.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 6918.HK:
cost_of_equity (15.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.31) + 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.