1314.HK WACC - Weighted Average Cost of Capital

The WACC of Tsui Wah Holdings Ltd (1314.HK) is 12.5%.

The Cost of Equity of Tsui Wah Holdings Ltd (1314.HK) is 7.35%.

The Cost of Debt of Tsui Wah Holdings Ltd (1314.HK) is 16.25%.

	Range	Selected
Cost of equity	5.80% - 8.90%	7.35%
Tax rate	6.10% - 6.60%	6.35%
Cost of debt	14.60% - 17.90%	16.25%
WACC	11.0% - 14.0%	12.5%

WACC

1314.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.90%

Tax rate	6.10%	6.60%
Debt/Equity ratio	1.91	1.91
Cost of debt	14.60%	17.90%

After-tax WACC	11.0%	14.0%


Selected WACC	12.5%

1314.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 1314.HK:

cost_of_equity (7.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.