894.HK WACC - Weighted Average Cost of Capital

The WACC of Man Yue Technology Holdings Ltd (894.HK) is 5.6%.

The Cost of Equity of Man Yue Technology Holdings Ltd (894.HK) is 6.70%.

The Cost of Debt of Man Yue Technology Holdings Ltd (894.HK) is 9.30%.

	Range	Selected
Cost of equity	5.00% - 8.40%	6.70%
Tax rate	32.50% - 44.80%	38.65%
Cost of debt	4.00% - 14.60%	9.30%
WACC	3.0% - 8.1%	5.6%

WACC

894.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.35	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.00%	8.40%

Tax rate	32.50%	44.80%
Debt/Equity ratio	5.83	5.83
Cost of debt	4.00%	14.60%

After-tax WACC	3.0%	8.1%


Selected WACC	5.6%

894.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 894.HK:

cost_of_equity (6.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + 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.