1631.HK WACC - Weighted Average Cost of Capital

The WACC of REF Holdings Ltd (1631.HK) is 5.9%.

The Cost of Equity of REF Holdings Ltd (1631.HK) is 6.10%.

The Cost of Debt of REF Holdings Ltd (1631.HK) is 5.95%.

	Range	Selected
Cost of equity	4.80% - 7.40%	6.10%
Tax rate	15.00% - 16.00%	15.50%
Cost of debt	4.10% - 7.80%	5.95%
WACC	4.5% - 7.2%	5.9%

WACC

1631.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.33	0.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	7.40%

Tax rate	15.00%	16.00%
Debt/Equity ratio	0.26	0.26
Cost of debt	4.10%	7.80%

After-tax WACC	4.5%	7.2%


Selected WACC	5.9%

1631.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 1631.HK:

cost_of_equity (6.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + 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.