1208.HK WACC - Weighted Average Cost of Capital

The WACC of MMG Ltd (1208.HK) is 8.5%.

The Cost of Equity of MMG Ltd (1208.HK) is 14.40%.

The Cost of Debt of MMG Ltd (1208.HK) is 5.00%.

	Range	Selected
Cost of equity	11.50% - 17.30%	14.40%
Tax rate	40.20% - 43.50%	41.85%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.1% - 9.9%	8.5%

WACC

1208.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.44	1.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	17.30%

Tax rate	40.20%	43.50%
Debt/Equity ratio	1.06	1.06
Cost of debt	5.00%	5.00%

After-tax WACC	7.1%	9.9%


Selected WACC	8.5%

1208.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 1208.HK:

cost_of_equity (14.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.44) + 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.