771.HK WACC - Weighted Average Cost of Capital

The WACC of Automated Systems Holdings Ltd (771.HK) is 8.1%.

The Cost of Equity of Automated Systems Holdings Ltd (771.HK) is 8.20%.

The Cost of Debt of Automated Systems Holdings Ltd (771.HK) is 5.10%.

	Range	Selected
Cost of equity	6.20% - 10.20%	8.20%
Tax rate	13.70% - 30.00%	21.85%
Cost of debt	4.00% - 6.20%	5.10%
WACC	6.1% - 10.1%	8.1%

WACC

771.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.55	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	10.20%

Tax rate	13.70%	30.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	6.20%

After-tax WACC	6.1%	10.1%


Selected WACC	8.1%

771.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 771.HK:

cost_of_equity (8.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.