707.HK WACC - Weighted Average Cost of Capital

The WACC of Asia Television Holdings Ltd (707.HK) is 5.6%.

The Cost of Equity of Asia Television Holdings Ltd (707.HK) is 5.75%.

The Cost of Debt of Asia Television Holdings Ltd (707.HK) is 5.70%.

	Range	Selected
Cost of equity	4.80% - 6.70%	5.75%
Tax rate	2.10% - 3.40%	2.75%
Cost of debt	4.40% - 7.00%	5.70%
WACC	4.4% - 6.8%	5.6%

WACC

707.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.32	0.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.70%

Tax rate	2.10%	3.40%
Debt/Equity ratio	4.08	4.08
Cost of debt	4.40%	7.00%

After-tax WACC	4.4%	6.8%


Selected WACC	5.6%

707.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 707.HK:

cost_of_equity (5.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.32) + 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.