CLWT WACC - Weighted Average Cost of Capital
The WACC of Euro Tech Holdings Company Ltd (CLWT) is 5.4%.
| Range | Selected | |
| Cost of equity | 4.0% - 6.9% | 5.45% |
| Tax rate | 26.7% - 43.7% | 35.2% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 4.0% - 6.8% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.34 | 0.63 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.0% | 6.9% |
| Tax rate | 26.7% | 43.7% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 4.0% | 6.8% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CLWT | Euro Tech Holdings Company Ltd | 0.03 | 0.14 | 0.14 |
| CCOM | CCOM Group Inc | 0.38 | 0.34 | 0.27 |
| EVI | EVI Industries Inc | 0.06 | 0.72 | 0.69 |
| GDL.TO | Goodfellow Inc | 0.27 | 0.58 | 0.5 |
| HWCC | Houston Wire & Cable Co | 0.37 | 1.35 | 1.09 |
| TXHG | TX Holdings Inc | 0.76 | -0.44 | -0.3 |
| 1196.HK | Realord Group Holdings Ltd | 1.18 | -0.01 | 0 |
| 1231.HK | Newton Resources Ltd | 0.01 | -0.3 | -0.3 |
| 1660.HK | Zhaobangji Properties Holdings Ltd | 0.04 | 0.79 | 0.77 |
| Low | High | |
| Unlevered beta | 0.16 | 0.45 |
| Relevered beta | 0.01 | 0.45 |
| Adjusted relevered beta | 0.34 | 0.63 |
CLWT'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 CLWT:
cost_of_equity (5.45%) = risk_free_rate (2.85%) + equity_risk_premium (4.70%) * adjusted_beta (0.34) + 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.