8140.HK WACC - Weighted Average Cost of Capital

The WACC of Bosa Technology Holdings Ltd (8140.HK) is 6.7%.

The Cost of Equity of Bosa Technology Holdings Ltd (8140.HK) is 6.85%.

The Cost of Debt of Bosa Technology Holdings Ltd (8140.HK) is 5.20%.

	Range	Selected
Cost of equity	5.10% - 8.60%	6.85%
Tax rate	17.50% - 19.70%	18.60%
Cost of debt	4.00% - 6.40%	5.20%
WACC	5.0% - 8.4%	6.7%

WACC

8140.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	8.60%

Tax rate	17.50%	19.70%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.00%	6.40%

After-tax WACC	5.0%	8.4%


Selected WACC	6.7%

8140.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 8140.HK:

cost_of_equity (6.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.