1575.HK WACC - Weighted Average Cost of Capital

The WACC of Morris Holdings Ltd (1575.HK) is 7.4%.

The Cost of Equity of Morris Holdings Ltd (1575.HK) is 10.20%.

The Cost of Debt of Morris Holdings Ltd (1575.HK) is 5.85%.

	Range	Selected
Cost of equity	6.80% - 13.60%	10.20%
Tax rate	0.30% - 1.30%	0.80%
Cost of debt	4.70% - 7.00%	5.85%
WACC	5.4% - 9.4%	7.4%

WACC

1575.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.65	1.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	13.60%

Tax rate	0.30%	1.30%
Debt/Equity ratio	1.69	1.69
Cost of debt	4.70%	7.00%

After-tax WACC	5.4%	9.4%


Selected WACC	7.4%

1575.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 1575.HK:

cost_of_equity (10.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.65) + 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.