1657.HK WACC - Weighted Average Cost of Capital

The WACC of SG Group Holdings Ltd (1657.HK) is 6.5%.

The Cost of Equity of SG Group Holdings Ltd (1657.HK) is 6.55%.

The Cost of Debt of SG Group Holdings Ltd (1657.HK) is 6.30%.

	Range	Selected
Cost of equity	5.30% - 7.80%	6.55%
Tax rate	11.50% - 35.10%	23.30%
Cost of debt	5.60% - 7.00%	6.30%
WACC	5.3% - 7.7%	6.5%

WACC

1657.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.4	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	7.80%

Tax rate	11.50%	35.10%
Debt/Equity ratio	0.02	0.02
Cost of debt	5.60%	7.00%

After-tax WACC	5.3%	7.7%


Selected WACC	6.5%

1657.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 1657.HK:

cost_of_equity (6.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.4) + 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.