696.HK WACC - Weighted Average Cost of Capital

The WACC of TravelSky Technology Ltd (696.HK) is 11.2%.

The Cost of Equity of TravelSky Technology Ltd (696.HK) is 11.45%.

The Cost of Debt of TravelSky Technology Ltd (696.HK) is 5.00%.

	Range	Selected
Cost of equity	9.80% - 13.10%	11.45%
Tax rate	9.30% - 10.60%	9.95%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.6% - 12.8%	11.2%

WACC

696.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.16	1.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	13.10%

Tax rate	9.30%	10.60%
Debt/Equity ratio	0.04	0.04
Cost of debt	5.00%	5.00%

After-tax WACC	9.6%	12.8%


Selected WACC	11.2%

696.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 696.HK:

cost_of_equity (11.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.16) + 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.