114.HK WACC - Weighted Average Cost of Capital
The WACC of Herald Holdings Ltd (114.HK) is 5.5%.
| Range | Selected | |
| Cost of equity | 4.9% - 6.3% | 5.6% |
| Tax rate | 15.9% - 22.1% | 19% |
| Cost of debt | 4.0% - 8.4% | 6.2% |
| WACC | 4.8% - 6.3% | 5.5% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.33 | 0.35 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.9% | 6.3% |
| Tax rate | 15.9% | 22.1% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.0% | 8.4% |
| After-tax WACC | 4.8% | 6.3% |
| Selected WACC | 5.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 114.HK | Herald Holdings Ltd | 0.04 | -0.02 | -0.02 |
| 1005.HK | Matrix Holdings Ltd | 0.2 | -0.75 | -0.64 |
| 1348.HK | Quali-Smart Holdings Ltd | 0.36 | 0.3 | 0.23 |
| 180.HK | Kader Holdings Co Ltd | 2.8 | 0.42 | 0.13 |
| 209.HK | Winshine Science Co Ltd | 9.78 | 0.18 | 0.02 |
| 381.HK | Kiu Hung International Holdings Ltd | 0.47 | -1.96 | -1.41 |
| 413.HK | South China Holdings Co Ltd | 8.89 | 0.29 | 0.03 |
| 635.HK | Playmates Holdings Ltd | 0.17 | 0.27 | 0.23 |
| 900270.KQ | Heng Sheng Holding Group Ltd | 1.22 | -0.41 | -0.2 |
| WAT.AX | Waterco Ltd | 0.32 | 0.02 | 0.02 |
| Low | High | |
| Unlevered beta | 0 | 0.03 |
| Relevered beta | 0 | 0.03 |
| Adjusted relevered beta | 0.33 | 0.35 |
114.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 114.HK:
cost_of_equity (5.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + 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.