8319.HK WACC - Weighted Average Cost of Capital

The WACC of Expert Systems Holdings Ltd (8319.HK) is 8.2%.

The Cost of Equity of Expert Systems Holdings Ltd (8319.HK) is 10.80%.

The Cost of Debt of Expert Systems Holdings Ltd (8319.HK) is 6.35%.

	Range	Selected
Cost of equity	7.40% - 14.20%	10.80%
Tax rate	18.00% - 20.50%	19.25%
Cost of debt	4.00% - 8.70%	6.35%
WACC	5.5% - 10.9%	8.2%

WACC

8319.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.76	1.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	14.20%

Tax rate	18.00%	20.50%
Debt/Equity ratio	0.82	0.82
Cost of debt	4.00%	8.70%

After-tax WACC	5.5%	10.9%


Selected WACC	8.2%

8319.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 8319.HK:

cost_of_equity (10.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.76) + 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.