1662.HK WACC - Weighted Average Cost of Capital

The WACC of Yee Hop Holdings Ltd (1662.HK) is 5.6%.

The Cost of Equity of Yee Hop Holdings Ltd (1662.HK) is 7.25%.

The Cost of Debt of Yee Hop Holdings Ltd (1662.HK) is 5.15%.

	Range	Selected
Cost of equity	5.40% - 9.10%	7.25%
Tax rate	29.50% - 38.20%	33.85%
Cost of debt	5.10% - 5.20%	5.15%
WACC	4.6% - 6.6%	5.6%

WACC

1662.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.42	0.75

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	9.10%

Tax rate	29.50%	38.20%
Debt/Equity ratio	0.76	0.76
Cost of debt	5.10%	5.20%

After-tax WACC	4.6%	6.6%


Selected WACC	5.6%

1662.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 1662.HK:

cost_of_equity (7.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.42) + 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.