765.HK WACC - Weighted Average Cost of Capital

The WACC of Perfectech International Holdings Ltd (765.HK) is 6.1%.

The Cost of Equity of Perfectech International Holdings Ltd (765.HK) is 6.50%.

The Cost of Debt of Perfectech International Holdings Ltd (765.HK) is 5.00%.

	Range	Selected
Cost of equity	5.40% - 7.60%	6.50%
Tax rate	7.50% - 24.00%	15.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.3% - 7.0%	6.1%

WACC

765.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.43	0.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	7.60%

Tax rate	7.50%	24.00%
Debt/Equity ratio	0.19	0.19
Cost of debt	5.00%	5.00%

After-tax WACC	5.3%	7.0%


Selected WACC	6.1%

765.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 765.HK:

cost_of_equity (6.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.