1086.HK
Goodbaby International Holdings Ltd
Price:  
1.14 
HKD
Volume:  
9,620,000.00
China | Leisure Products
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1086.HK WACC - Weighted Average Cost of Capital

The WACC of Goodbaby International Holdings Ltd (1086.HK) is 9.9%.

The Cost of Equity of Goodbaby International Holdings Ltd (1086.HK) is 15.25%.
The Cost of Debt of Goodbaby International Holdings Ltd (1086.HK) is 4.55%.

Range Selected
Cost of equity 12.90% - 17.60% 15.25%
Tax rate 10.90% - 16.30% 13.60%
Cost of debt 4.00% - 5.10% 4.55%
WACC 8.5% - 11.3% 9.9%
WACC

1086.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.68 1.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.90% 17.60%
Tax rate 10.90% 16.30%
Debt/Equity ratio 0.9 0.9
Cost of debt 4.00% 5.10%
After-tax WACC 8.5% 11.3%
Selected WACC 9.9%

1086.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 1086.HK:

cost_of_equity (15.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.68) + 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.