The WACC of Boltek Holdings Ltd (8601.HK) is 7.3%.
Range | Selected | |
Cost of equity | 6.2% - 8.7% | 7.45% |
Tax rate | 13.9% - 14.6% | 14.25% |
Cost of debt | 4.0% - 5.3% | 4.65% |
WACC | 6.1% - 8.5% | 7.3% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.55 | 0.69 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.2% | 8.7% |
Tax rate | 13.9% | 14.6% |
Debt/Equity ratio | 0.04 | 0.04 |
Cost of debt | 4.0% | 5.3% |
After-tax WACC | 6.1% | 8.5% |
Selected WACC | 7.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
8601.HK | Boltek Holdings Ltd | 0.04 | 0.39 | 0.37 |
1246.HK | Boill Healthcare Holdings Ltd | 29.53 | -0.23 | -0.01 |
1591.HK | Shun Wo Group Holdings Ltd | 0.01 | 0.69 | 0.68 |
1751.HK | Kingland Group Holdings Ltd | 0.2 | 0.29 | 0.25 |
1894.HK | Hang Yick Holdings Co Ltd | 0.01 | 1.09 | 1.08 |
8023.HK | Kwong Man Kee Group Ltd | 0.05 | -0.5 | -0.48 |
8366.HK | Zhejiang United Investment Holdings Group Ltd | 0.47 | 0.7 | 0.5 |
8460.HK | Basetrophy Group Holdings Ltd | 1.04 | -0.31 | -0.16 |
9929.HK | Sem Holdings Ltd | 0.07 | 0.58 | 0.55 |
9938.HK | Wah Wo Holdings Group Ltd | 0.06 | 0.74 | 0.7 |
Low | High | |
Unlevered beta | 0.32 | 0.52 |
Relevered beta | 0.33 | 0.54 |
Adjusted relevered beta | 0.55 | 0.69 |
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 8601.HK:
cost_of_equity (7.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.