1215.HK WACC - Weighted Average Cost of Capital

The WACC of Kai Yuan Holdings Ltd (1215.HK) is 9.8%.

The Cost of Equity of Kai Yuan Holdings Ltd (1215.HK) is 16.85%.

The Cost of Debt of Kai Yuan Holdings Ltd (1215.HK) is 11.95%.

	Range	Selected
Cost of equity	7.80% - 25.90%	16.85%
Tax rate	21.20% - 25.60%	23.40%
Cost of debt	4.00% - 19.90%	11.95%
WACC	3.7% - 16.0%	9.8%

WACC

1215.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.83	3.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	25.90%

Tax rate	21.20%	25.60%
Debt/Equity ratio	8.31	8.31
Cost of debt	4.00%	19.90%

After-tax WACC	3.7%	16.0%


Selected WACC	9.8%

1215.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 1215.HK:

cost_of_equity (16.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.