821.HK
Value Convergence Holdings Ltd
Price:  
0.04 
HKD
Volume:  
300,000.00
Hong Kong | Capital Markets
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821.HK WACC - Weighted Average Cost of Capital

The WACC of Value Convergence Holdings Ltd (821.HK) is 6.4%.

The Cost of Equity of Value Convergence Holdings Ltd (821.HK) is 6.85%.
The Cost of Debt of Value Convergence Holdings Ltd (821.HK) is 5.50%.

Range Selected
Cost of equity 5.20% - 8.50% 6.85%
Tax rate 1.20% - 3.00% 2.10%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.8% - 7.9% 6.4%
WACC

821.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.4 0.66
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.20% 8.50%
Tax rate 1.20% 3.00%
Debt/Equity ratio 0.51 0.51
Cost of debt 4.00% 7.00%
After-tax WACC 4.8% 7.9%
Selected WACC 6.4%

821.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 821.HK:

cost_of_equity (6.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.4) + 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.