1581.HK WACC - Weighted Average Cost of Capital

The WACC of Progressive Path Group Holdings Ltd (1581.HK) is 5.7%.

The Cost of Equity of Progressive Path Group Holdings Ltd (1581.HK) is 6.35%.

The Cost of Debt of Progressive Path Group Holdings Ltd (1581.HK) is 5.65%.

	Range	Selected
Cost of equity	5.40% - 7.30%	6.35%
Tax rate	6.00% - 10.50%	8.25%
Cost of debt	5.30% - 6.00%	5.65%
WACC	5.1% - 6.2%	5.7%

WACC

1581.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.43	0.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	7.30%

Tax rate	6.00%	10.50%
Debt/Equity ratio	1.36	1.36
Cost of debt	5.30%	6.00%

After-tax WACC	5.1%	6.2%


Selected WACC	5.7%

1581.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 1581.HK:

cost_of_equity (6.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.