1547.HK WACC - Weighted Average Cost of Capital

The WACC of IBI Group Holdings Ltd (1547.HK) is 5.3%.

The Cost of Equity of IBI Group Holdings Ltd (1547.HK) is 5.50%.

The Cost of Debt of IBI Group Holdings Ltd (1547.HK) is 6.25%.

	Range	Selected
Cost of equity	4.70% - 6.30%	5.50%
Tax rate	18.70% - 27.40%	23.05%
Cost of debt	4.10% - 8.40%	6.25%
WACC	4.3% - 6.2%	5.3%

WACC

1547.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.31	0.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.70%	6.30%

Tax rate	18.70%	27.40%
Debt/Equity ratio	0.4	0.4
Cost of debt	4.10%	8.40%

After-tax WACC	4.3%	6.2%


Selected WACC	5.3%

1547.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 1547.HK:

cost_of_equity (5.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.31) + 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.