1003.HK WACC - Weighted Average Cost of Capital

The WACC of Huanxi Media Group Ltd (1003.HK) is 6.5%.

The Cost of Equity of Huanxi Media Group Ltd (1003.HK) is 6.35%.

The Cost of Debt of Huanxi Media Group Ltd (1003.HK) is 11.60%.

	Range	Selected
Cost of equity	5.40% - 7.30%	6.35%
Tax rate	2.70% - 5.30%	4.00%
Cost of debt	7.00% - 16.20%	11.60%
WACC	5.5% - 7.6%	6.5%

WACC

1003.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.35	0.41

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.40%	7.30%

Tax rate	2.70%	5.30%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.00%	16.20%

After-tax WACC	5.5%	7.6%


Selected WACC	6.5%

1003.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 1003.HK:

cost_of_equity (6.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.