1540.HK WACC - Weighted Average Cost of Capital

The WACC of Left Field Printing Group Ltd (1540.HK) is 7.9%.

The Cost of Equity of Left Field Printing Group Ltd (1540.HK) is 8.15%.

The Cost of Debt of Left Field Printing Group Ltd (1540.HK) is 4.70%.

	Range	Selected
Cost of equity	6.50% - 9.80%	8.15%
Tax rate	31.00% - 31.30%	31.15%
Cost of debt	4.00% - 5.40%	4.70%
WACC	6.4% - 9.5%	7.9%

WACC

1540.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.61	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.80%

Tax rate	31.00%	31.30%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	5.40%

After-tax WACC	6.4%	9.5%


Selected WACC	7.9%

1540.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 1540.HK:

cost_of_equity (8.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.61) + 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.