77.HK WACC - Weighted Average Cost of Capital

The WACC of Ams Public Transport Holdings Ltd (77.HK) is 6.5%.

The Cost of Equity of Ams Public Transport Holdings Ltd (77.HK) is 11.05%.

The Cost of Debt of Ams Public Transport Holdings Ltd (77.HK) is 4.55%.

	Range	Selected
Cost of equity	7.70% - 14.40%	11.05%
Tax rate	10.10% - 21.70%	15.90%
Cost of debt	4.00% - 5.10%	4.55%
WACC	5.1% - 7.9%	6.5%

WACC

77.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.8	1.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	14.40%

Tax rate	10.10%	21.70%
Debt/Equity ratio	1.64	1.64
Cost of debt	4.00%	5.10%

After-tax WACC	5.1%	7.9%


Selected WACC	6.5%

77.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 77.HK:

cost_of_equity (11.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.8) + 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.