1521.HK WACC - Weighted Average Cost of Capital

The WACC of Frontage Holdings Corp (1521.HK) is 10.1%.

The Cost of Equity of Frontage Holdings Corp (1521.HK) is 11.40%.

The Cost of Debt of Frontage Holdings Corp (1521.HK) is 10.50%.

	Range	Selected
Cost of equity	9.30% - 13.50%	11.40%
Tax rate	25.60% - 27.10%	26.35%
Cost of debt	6.40% - 14.60%	10.50%
WACC	7.7% - 12.5%	10.1%

WACC

1521.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.08	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	13.50%

Tax rate	25.60%	27.10%
Debt/Equity ratio	0.55	0.55
Cost of debt	6.40%	14.60%

After-tax WACC	7.7%	12.5%


Selected WACC	10.1%

1521.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 1521.HK:

cost_of_equity (11.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.08) + 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.