1498.HK WACC - Weighted Average Cost of Capital

The WACC of PuraPharm Corp Ltd (1498.HK) is 6.5%.

The Cost of Equity of PuraPharm Corp Ltd (1498.HK) is 7.30%.

The Cost of Debt of PuraPharm Corp Ltd (1498.HK) is 6.35%.

	Range	Selected
Cost of equity	6.00% - 8.60%	7.30%
Tax rate	3.20% - 3.80%	3.50%
Cost of debt	5.70% - 7.00%	6.35%
WACC	5.7% - 7.3%	6.5%

WACC

1498.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.52	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	8.60%

Tax rate	3.20%	3.80%
Debt/Equity ratio	2.18	2.18
Cost of debt	5.70%	7.00%

After-tax WACC	5.7%	7.3%


Selected WACC	6.5%

1498.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 1498.HK:

cost_of_equity (7.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.52) + 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.