1722.HK WACC - Weighted Average Cost of Capital

The WACC of Kin Pang Holdings Ltd (1722.HK) is 7.6%.

The Cost of Equity of Kin Pang Holdings Ltd (1722.HK) is 11.30%.

The Cost of Debt of Kin Pang Holdings Ltd (1722.HK) is 6.20%.

	Range	Selected
Cost of equity	9.70% - 12.90%	11.30%
Tax rate	12.70% - 20.10%	16.40%
Cost of debt	5.40% - 7.00%	6.20%
WACC	6.7% - 8.5%	7.6%

WACC

1722.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.14	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	12.90%

Tax rate	12.70%	20.10%
Debt/Equity ratio	1.54	1.54
Cost of debt	5.40%	7.00%

After-tax WACC	6.7%	8.5%


Selected WACC	7.6%

1722.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 1722.HK:

cost_of_equity (11.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.14) + 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.