6918.HK WACC - Weighted Average Cost of Capital

The WACC of Kidztech Holdings Ltd (6918.HK) is 8.9%.

The Cost of Equity of Kidztech Holdings Ltd (6918.HK) is 15.05%.

The Cost of Debt of Kidztech Holdings Ltd (6918.HK) is 6.80%.

	Range	Selected
Cost of equity	10.00% - 20.10%	15.05%
Tax rate	7.20% - 11.70%	9.45%
Cost of debt	6.60% - 7.00%	6.80%
WACC	7.3% - 10.6%	8.9%

WACC

6918.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.19	2.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	20.10%

Tax rate	7.20%	11.70%
Debt/Equity ratio	2.19	2.19
Cost of debt	6.60%	7.00%

After-tax WACC	7.3%	10.6%


Selected WACC	8.9%

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 (15.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.19) + 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.