894.HK WACC - Weighted Average Cost of Capital

The WACC of Man Yue Technology Holdings Ltd (894.HK) is 6.4%.

The Cost of Equity of Man Yue Technology Holdings Ltd (894.HK) is 9.05%.

The Cost of Debt of Man Yue Technology Holdings Ltd (894.HK) is 9.45%.

	Range	Selected
Cost of equity	7.40% - 10.70%	9.05%
Tax rate	32.50% - 44.80%	38.65%
Cost of debt	4.30% - 14.60%	9.45%
WACC	4.1% - 8.8%	6.4%

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	0.75	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	10.70%

Tax rate	32.50%	44.80%
Debt/Equity ratio	2.75	2.75
Cost of debt	4.30%	14.60%

After-tax WACC	4.1%	8.8%


Selected WACC	6.4%

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 (9.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.75) + 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.