8606.HK WACC - Weighted Average Cost of Capital

The WACC of Kinetix Systems Holdings Ltd (8606.HK) is 6.9%.

The Cost of Equity of Kinetix Systems Holdings Ltd (8606.HK) is 6.90%.

The Cost of Debt of Kinetix Systems Holdings Ltd (8606.HK) is 5.50%.

	Range	Selected
Cost of equity	5.90% - 7.90%	6.90%
Tax rate	0.30% - 1.40%	0.85%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.8% - 7.9%	6.9%

WACC

8606.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.5	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	7.90%

Tax rate	0.30%	1.40%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	7.00%

After-tax WACC	5.8%	7.9%


Selected WACC	6.9%

8606.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 8606.HK:

cost_of_equity (6.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.