8198.HK WACC - Weighted Average Cost of Capital

The WACC of Loto Interactive Ltd (8198.HK) is 6.2%.

The Cost of Equity of Loto Interactive Ltd (8198.HK) is 6.15%.

The Cost of Debt of Loto Interactive Ltd (8198.HK) is 8.75%.

	Range	Selected
Cost of equity	5.10% - 7.20%	6.15%
Tax rate	0.10% - 0.60%	0.35%
Cost of debt	7.00% - 10.50%	8.75%
WACC	5.1% - 7.3%	6.2%

WACC

8198.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.37	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	7.20%

Tax rate	0.10%	0.60%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.00%	10.50%

After-tax WACC	5.1%	7.3%


Selected WACC	6.2%

8198.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 8198.HK:

cost_of_equity (6.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.