8042.HK WACC - Weighted Average Cost of Capital

The WACC of KOS International Holdings Ltd (8042.HK) is 6.1%.

The Cost of Equity of KOS International Holdings Ltd (8042.HK) is 6.20%.

The Cost of Debt of KOS International Holdings Ltd (8042.HK) is 6.80%.

	Range	Selected
Cost of equity	5.20% - 7.20%	6.20%
Tax rate	13.10% - 14.30%	13.70%
Cost of debt	6.60% - 7.00%	6.80%
WACC	5.3% - 6.9%	6.1%

WACC

8042.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.31	0.41

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.20%	7.20%

Tax rate	13.10%	14.30%
Debt/Equity ratio	0.3	0.3
Cost of debt	6.60%	7.00%

After-tax WACC	5.3%	6.9%


Selected WACC	6.1%

8042.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 8042.HK:

cost_of_equity (6.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.31) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.