872.HK WACC - Weighted Average Cost of Capital

The WACC of TUS International Ltd (872.HK) is 6.9%.

The Cost of Equity of TUS International Ltd (872.HK) is 8.65%.

The Cost of Debt of TUS International Ltd (872.HK) is 7.00%.

	Range	Selected
Cost of equity	6.80% - 10.50%	8.65%
Tax rate	4.40% - 5.30%	4.85%
Cost of debt	7.00% - 7.00%	7.00%
WACC	6.7% - 7.1%	6.9%

WACC

872.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.66	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	10.50%

Tax rate	4.40%	5.30%
Debt/Equity ratio	6.72	6.72
Cost of debt	7.00%	7.00%

After-tax WACC	6.7%	7.1%


Selected WACC	6.9%

872.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 872.HK:

cost_of_equity (8.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.66) + 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.