900.HK WACC - Weighted Average Cost of Capital

The WACC of Aeon Credit Service Asia Co Ltd (900.HK) is 6.6%.

The Cost of Equity of Aeon Credit Service Asia Co Ltd (900.HK) is 9.80%.

The Cost of Debt of Aeon Credit Service Asia Co Ltd (900.HK) is 4.25%.

	Range	Selected
Cost of equity	7.90% - 11.70%	9.80%
Tax rate	16.50% - 16.90%	16.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.6% - 7.6%	6.6%

WACC

900.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.85	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	11.70%

Tax rate	16.50%	16.90%
Debt/Equity ratio	1.04	1.04
Cost of debt	4.00%	4.50%

After-tax WACC	5.6%	7.6%


Selected WACC	6.6%

900.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 900.HK:

cost_of_equity (9.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.85) + 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.