1112.HK WACC - Weighted Average Cost of Capital

The WACC of Health and Happiness (H&H) International Holdings Ltd (1112.HK) is 5.9%.

The Cost of Equity of Health and Happiness (H&H) International Holdings Ltd (1112.HK) is 8.85%.

The Cost of Debt of Health and Happiness (H&H) International Holdings Ltd (1112.HK) is 6.30%.

	Range	Selected
Cost of equity	7.70% - 10.00%	8.85%
Tax rate	39.20% - 40.40%	39.80%
Cost of debt	6.10% - 6.50%	6.30%
WACC	5.4% - 6.5%	5.9%

WACC

1112.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.8	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	10.00%

Tax rate	39.20%	40.40%
Debt/Equity ratio	1.35	1.35
Cost of debt	6.10%	6.50%

After-tax WACC	5.4%	6.5%


Selected WACC	5.9%

1112.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 1112.HK:

cost_of_equity (8.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.8) + 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.