1581.HK WACC - Weighted Average Cost of Capital

The WACC of Progressive Path Group Holdings Ltd (1581.HK) is 6.4%.

The Cost of Equity of Progressive Path Group Holdings Ltd (1581.HK) is 12.55%.

The Cost of Debt of Progressive Path Group Holdings Ltd (1581.HK) is 5.25%.

	Range	Selected
Cost of equity	6.20% - 18.90%	12.55%
Tax rate	6.00% - 7.50%	6.75%
Cost of debt	4.60% - 5.90%	5.25%
WACC	4.7% - 8.2%	6.4%

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	0.56	2.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	18.90%

Tax rate	6.00%	7.50%
Debt/Equity ratio	3.95	3.95
Cost of debt	4.60%	5.90%

After-tax WACC	4.7%	8.2%


Selected WACC	6.4%

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 (12.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.