125.HK WACC - Weighted Average Cost of Capital

The WACC of Sun Hing Vision Group Holdings Ltd (125.HK) is 5.2%.

The Cost of Equity of Sun Hing Vision Group Holdings Ltd (125.HK) is 5.65%.

The Cost of Debt of Sun Hing Vision Group Holdings Ltd (125.HK) is 5.50%.

	Range	Selected
Cost of equity	4.90% - 6.40%	5.65%
Tax rate	17.40% - 23.90%	20.65%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.4% - 6.1%	5.2%

WACC

125.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.35	0.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.90%	6.40%

Tax rate	17.40%	23.90%
Debt/Equity ratio	0.49	0.49
Cost of debt	4.00%	7.00%

After-tax WACC	4.4%	6.1%


Selected WACC	5.2%

125.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 125.HK:

cost_of_equity (5.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + 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.