999.HK WACC - Weighted Average Cost of Capital

The WACC of I.T. Ltd (999.HK) is 7.1%.

The Cost of Equity of I.T. Ltd (999.HK) is 9.05%.

The Cost of Debt of I.T. Ltd (999.HK) is 8.80%.

	Range	Selected
Cost of equity	7.70% - 10.40%	9.05%
Tax rate	37.60% - 38.80%	38.20%
Cost of debt	4.60% - 13.00%	8.80%
WACC	5.1% - 9.1%	7.1%

WACC

999.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.87	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	10.40%

Tax rate	37.60%	38.80%
Debt/Equity ratio	1.21	1.21
Cost of debt	4.60%	13.00%

After-tax WACC	5.1%	9.1%


Selected WACC	7.1%

999.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 999.HK:

cost_of_equity (9.05%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.87) + 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.