1319.HK WACC - Weighted Average Cost of Capital

The WACC of Oi Wah Pawnshop Credit Holdings Ltd (1319.HK) is 8.0%.

The Cost of Equity of Oi Wah Pawnshop Credit Holdings Ltd (1319.HK) is 8.65%.

The Cost of Debt of Oi Wah Pawnshop Credit Holdings Ltd (1319.HK) is 4.65%.

	Range	Selected
Cost of equity	6.50% - 10.80%	8.65%
Tax rate	16.30% - 16.30%	16.30%
Cost of debt	4.00% - 5.30%	4.65%
WACC	6.1% - 9.9%	8.0%

WACC

1319.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.61	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	10.80%

Tax rate	16.30%	16.30%
Debt/Equity ratio	0.15	0.15
Cost of debt	4.00%	5.30%

After-tax WACC	6.1%	9.9%


Selected WACC	8.0%

1319.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 1319.HK:

cost_of_equity (8.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.61) + 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.