712.HK WACC - Weighted Average Cost of Capital

The WACC of Comtec Solar Systems Group Ltd (712.HK) is 10.7%.

The Cost of Equity of Comtec Solar Systems Group Ltd (712.HK) is 21.90%.

The Cost of Debt of Comtec Solar Systems Group Ltd (712.HK) is 5.50%.

	Range	Selected
Cost of equity	17.60% - 26.20%	21.90%
Tax rate	4.60% - 5.40%	5.00%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.3% - 13.0%	10.7%

WACC

712.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.46	3.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.60%	26.20%

Tax rate	4.60%	5.40%
Debt/Equity ratio	2.07	2.07
Cost of debt	4.00%	7.00%

After-tax WACC	8.3%	13.0%


Selected WACC	10.7%

712.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 712.HK:

cost_of_equity (21.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.46) + 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.