BNSO WACC - Weighted Average Cost of Capital
The WACC of Bonso Electronics International Inc (BNSO) is 8.6%.
| Range | Selected | |
| Cost of equity | 7.9% - 10.6% | 9.25% |
| Tax rate | 3.5% - 14.1% | 8.8% |
| Cost of debt | 6.2% - 7.0% | 6.6% |
| WACC | 7.5% - 9.8% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.11 | 1.23 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 10.6% |
| Tax rate | 3.5% | 14.1% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 6.2% | 7.0% |
| After-tax WACC | 7.5% | 9.8% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BNSO | Bonso Electronics International Inc | 0.23 | 0.55 | 0.46 |
| Low | High | |
| Unlevered beta | 0.46 | 0.46 |
| Relevered beta | 1.16 | 1.34 |
| Adjusted relevered beta | 1.11 | 1.23 |
BNSO'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 BNSO:
cost_of_equity (9.25%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.11) + 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.