The WACC of C.banner International Holdings Ltd (1028.HK) is 8.6%.
Range | Selected | |
Cost of equity | 6.2% - 11.3% | 8.75% |
Tax rate | 22.1% - 22.3% | 22.2% |
Cost of debt | 4.0% - 8.0% | 6% |
WACC | 6.1% - 11.1% | 8.6% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.56 | 1.06 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.2% | 11.3% |
Tax rate | 22.1% | 22.3% |
Debt/Equity ratio | 0.04 | 0.04 |
Cost of debt | 4.0% | 8.0% |
After-tax WACC | 6.1% | 11.1% |
Selected WACC | 8.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
1028.HK | C.banner International Holdings Ltd | 0.04 | 0.16 | 0.15 |
002291.SZ | Saturday Co Ltd | 0.25 | 1.7 | 1.42 |
002740.SZ | Fujian Ideal Jewelry Industrial Co Ltd | 4.96 | 1.25 | 0.26 |
002875.SZ | Annil Co Ltd | 0.04 | 1.59 | 1.53 |
210.HK | Daphne International Holdings Ltd | 0.01 | 0.34 | 0.34 |
603001.SS | Zhejiang Aokang Shoes Co Ltd | 0.14 | 0.94 | 0.85 |
603608.SS | Topscore Fashion Co Ltd | 0.18 | 0.2 | 0.18 |
603958.SS | Harson Trading China Co Ltd | 0 | 1.38 | 1.38 |
7938.T | Regal Corp | 1.32 | 0.65 | 0.32 |
XDL.KL | Xidelang Holdings Ltd | 0.17 | 1.92 | 1.69 |
Low | High | |
Unlevered beta | 0.33 | 1.06 |
Relevered beta | 0.34 | 1.09 |
Adjusted relevered beta | 0.56 | 1.06 |
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 1028.HK:
cost_of_equity (8.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.