1539.HK WACC - Weighted Average Cost of Capital

The WACC of Synergy Group Holdings International Ltd (1539.HK) is 6.3%.

The Cost of Equity of Synergy Group Holdings International Ltd (1539.HK) is 5.95%.

The Cost of Debt of Synergy Group Holdings International Ltd (1539.HK) is 12.60%.

	Range	Selected
Cost of equity	5.20% - 6.70%	5.95%
Tax rate	6.70% - 14.20%	10.45%
Cost of debt	5.30% - 19.90%	12.60%
WACC	5.2% - 7.4%	6.3%

WACC

1539.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.3	0.33

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.20%	6.70%

Tax rate	6.70%	14.20%
Debt/Equity ratio	0.08	0.08
Cost of debt	5.30%	19.90%

After-tax WACC	5.2%	7.4%


Selected WACC	6.3%

1539.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 1539.HK:

cost_of_equity (5.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.3) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.