The WACC of C Cheng Holdings Ltd (1486.HK) is 8.0%.
Range | Selected | |
Cost of equity | 7.7% - 14.8% | 11.25% |
Tax rate | 6.6% - 14.8% | 10.7% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.7% - 10.2% | 8.0% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.81 | 1.57 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.7% | 14.8% |
Tax rate | 6.6% | 14.8% |
Debt/Equity ratio | 1.07 | 1.07 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.7% | 10.2% |
Selected WACC | 8.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
1486.HK | C Cheng Holdings Ltd | 1.07 | 0.04 | 0.02 |
046120.KQ | Orbitech Co Ltd | 0.32 | 1.77 | 1.36 |
4792.T | Yamada Consulting Group Co Ltd | 0.05 | 0.95 | 0.91 |
6128.HK | Earthasia International Holdings Ltd | 1.17 | 1.21 | 0.58 |
6192.T | HyAS&Co. Inc | 0.23 | -0.1 | -0.08 |
7038.T | Frontier Management Inc | 0.18 | 1.11 | 0.95 |
8039.HK | KNK Holdings Ltd | 0.11 | 1.64 | 1.49 |
8072.HK | Roma Group Ltd | 1.58 | -0.53 | -0.21 |
8619.HK | WAC Holdings Ltd | 0.22 | -0.3 | -0.25 |
9644.T | Tanabe Consulting Co Ltd | 0.01 | 1.09 | 1.08 |
Low | High | |
Unlevered beta | 0.36 | 0.93 |
Relevered beta | 0.72 | 1.85 |
Adjusted relevered beta | 0.81 | 1.57 |
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 1486.HK:
cost_of_equity (11.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.81) + 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.