8601.HK WACC - Weighted Average Cost of Capital

The WACC of Boltek Holdings Ltd (8601.HK) is 7.1%.

The Cost of Equity of Boltek Holdings Ltd (8601.HK) is 7.25%.

The Cost of Debt of Boltek Holdings Ltd (8601.HK) is 4.65%.

	Range	Selected
Cost of equity	6.20% - 8.30%	7.25%
Tax rate	13.90% - 14.60%	14.25%
Cost of debt	4.00% - 5.30%	4.65%
WACC	6.1% - 8.1%	7.1%

WACC

8601.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.56	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.30%

Tax rate	13.90%	14.60%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	5.30%

After-tax WACC	6.1%	8.1%


Selected WACC	7.1%

8601.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 8601.HK:

cost_of_equity (7.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.