1536.HK WACC - Weighted Average Cost of Capital

The WACC of Yuk Wing Group Holdings Ltd (1536.HK) is 5.8%.

The Cost of Equity of Yuk Wing Group Holdings Ltd (1536.HK) is 6.90%.

The Cost of Debt of Yuk Wing Group Holdings Ltd (1536.HK) is 5.50%.

	Range	Selected
Cost of equity	5.30% - 8.50%	6.90%
Tax rate	17.70% - 25.80%	21.75%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.5% - 7.1%	5.8%

WACC

1536.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.41	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	8.50%

Tax rate	17.70%	25.80%
Debt/Equity ratio	0.73	0.73
Cost of debt	4.00%	7.00%

After-tax WACC	4.5%	7.1%


Selected WACC	5.8%

1536.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 1536.HK:

cost_of_equity (6.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.