125.HK WACC - Weighted Average Cost of Capital

The WACC of Sun Hing Vision Group Holdings Ltd (125.HK) is 6.5%.

The Cost of Equity of Sun Hing Vision Group Holdings Ltd (125.HK) is 7.45%.

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

	Range	Selected
Cost of equity	5.50% - 9.40%	7.45%
Tax rate	9.20% - 17.50%	13.35%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.9% - 8.1%	6.5%

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	0.45	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	9.40%

Tax rate	9.20%	17.50%
Debt/Equity ratio	0.53	0.53
Cost of debt	4.00%	7.00%

After-tax WACC	4.9%	8.1%


Selected WACC	6.5%

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 (7.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.