812.HK WACC - Weighted Average Cost of Capital

The WACC of Southwest Securities International Securities Ltd (812.HK) is 5.6%.

The Cost of Equity of Southwest Securities International Securities Ltd (812.HK) is 6.20%.

The Cost of Debt of Southwest Securities International Securities Ltd (812.HK) is 6.65%.

	Range	Selected
Cost of equity	5.30% - 7.10%	6.20%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	6.30% - 7.00%	6.65%
WACC	5.1% - 6.2%	5.6%

WACC

812.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.41	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	7.10%

Tax rate	22.10%	22.30%
Debt/Equity ratio	1.26	1.26
Cost of debt	6.30%	7.00%

After-tax WACC	5.1%	6.2%


Selected WACC	5.6%

812.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 812.HK:

cost_of_equity (6.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.