994.HK WACC - Weighted Average Cost of Capital

The WACC of CT Vision (International) Holdings Ltd (994.HK) is 8.0%.

The Cost of Equity of CT Vision (International) Holdings Ltd (994.HK) is 8.05%.

The Cost of Debt of CT Vision (International) Holdings Ltd (994.HK) is 6.70%.

	Range	Selected
Cost of equity	7.00% - 9.10%	8.05%
Tax rate	3.60% - 5.80%	4.70%
Cost of debt	6.40% - 7.00%	6.70%
WACC	7.0% - 9.1%	8.0%

WACC

994.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.69	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	9.10%

Tax rate	3.60%	5.80%
Debt/Equity ratio	0.02	0.02
Cost of debt	6.40%	7.00%

After-tax WACC	7.0%	9.1%


Selected WACC	8.0%

994.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 994.HK:

cost_of_equity (8.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.69) + 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.