1028.HK WACC - Weighted Average Cost of Capital

The WACC of C.banner International Holdings Ltd (1028.HK) is 8.5%.

The Cost of Equity of C.banner International Holdings Ltd (1028.HK) is 8.75%.

The Cost of Debt of C.banner International Holdings Ltd (1028.HK) is 4.50%.

	Range	Selected
Cost of equity	6.50% - 11.00%	8.75%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 5.00%	4.50%
WACC	6.3% - 10.7%	8.5%

WACC

1028.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.6	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	11.00%

Tax rate	22.10%	22.30%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	5.00%

After-tax WACC	6.3%	10.7%


Selected WACC	8.5%

1028.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 1028.HK:

cost_of_equity (8.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.6) + 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.