8051.HK WACC - Weighted Average Cost of Capital

The WACC of CircuTech International Holdings Ltd (8051.HK) is 8.3%.

The Cost of Equity of CircuTech International Holdings Ltd (8051.HK) is 8.30%.

The Cost of Debt of CircuTech International Holdings Ltd (8051.HK) is 5.30%.

	Range	Selected
Cost of equity	6.60% - 10.00%	8.30%
Tax rate	30.80% - 41.30%	36.05%
Cost of debt	4.00% - 6.60%	5.30%
WACC	6.6% - 10.0%	8.3%

WACC

8051.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.62	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	10.00%

Tax rate	30.80%	41.30%
Debt/Equity ratio	0	0
Cost of debt	4.00%	6.60%

After-tax WACC	6.6%	10.0%


Selected WACC	8.3%

8051.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 8051.HK:

cost_of_equity (8.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.62) + 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.