8013.HK WACC - Weighted Average Cost of Capital

The WACC of ECI Technology Holdings Ltd (8013.HK) is 7.3%.

The Cost of Equity of ECI Technology Holdings Ltd (8013.HK) is 7.65%.

The Cost of Debt of ECI Technology Holdings Ltd (8013.HK) is 4.25%.

	Range	Selected
Cost of equity	6.20% - 9.10%	7.65%
Tax rate	3.60% - 4.90%	4.25%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.0% - 8.6%	7.3%

WACC

8013.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.56	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	9.10%

Tax rate	3.60%	4.90%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.00%	4.50%

After-tax WACC	6.0%	8.6%


Selected WACC	7.3%

8013.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 8013.HK:

cost_of_equity (7.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.