18.HK WACC - Weighted Average Cost of Capital

The WACC of Oriental Press Group Ltd (18.HK) is 7.0%.

The Cost of Equity of Oriental Press Group Ltd (18.HK) is 7.05%.

The Cost of Debt of Oriental Press Group Ltd (18.HK) is 5.45%.

	Range	Selected
Cost of equity	6.10% - 8.00%	7.05%
Tax rate	13.40% - 16.70%	15.05%
Cost of debt	4.00% - 6.90%	5.45%
WACC	6.1% - 8.0%	7.0%

WACC

18.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.54	0.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.00%

Tax rate	13.40%	16.70%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	6.90%

After-tax WACC	6.1%	8.0%


Selected WACC	7.0%

18.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 18.HK:

cost_of_equity (7.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.