1737.HK WACC - Weighted Average Cost of Capital

The WACC of A & S Group (Holdings) Limited (1737.HK) is 8.2%.

The Cost of Equity of A & S Group (Holdings) Limited (1737.HK) is 8.50%.

The Cost of Debt of A & S Group (Holdings) Limited (1737.HK) is 4.30%.

	Range	Selected
Cost of equity	5.80% - 11.20%	8.50%
Tax rate	2.50% - 9.00%	5.75%
Cost of debt	4.10% - 4.50%	4.30%
WACC	5.7% - 10.6%	8.2%

WACC

1737.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.5	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	11.20%

Tax rate	2.50%	9.00%
Debt/Equity ratio	0.09	0.09
Cost of debt	4.10%	4.50%

After-tax WACC	5.7%	10.6%


Selected WACC	8.2%

1737.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 1737.HK:

cost_of_equity (8.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.