1591.HK WACC - Weighted Average Cost of Capital

The WACC of Shun Wo Group Holdings Ltd (1591.HK) is 6.3%.

The Cost of Equity of Shun Wo Group Holdings Ltd (1591.HK) is 7.80%.

The Cost of Debt of Shun Wo Group Holdings Ltd (1591.HK) is 5.00%.

	Range	Selected
Cost of equity	6.30% - 9.30%	7.80%
Tax rate	0.70% - 3.00%	1.85%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.6% - 7.1%	6.3%

WACC

1591.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.57	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	9.30%

Tax rate	0.70%	3.00%
Debt/Equity ratio	1	1
Cost of debt	5.00%	5.00%

After-tax WACC	5.6%	7.1%


Selected WACC	6.3%

1591.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 1591.HK:

cost_of_equity (7.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.57) + 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.