1803.HK WACC - Weighted Average Cost of Capital

The WACC of Beijing Sports and Entertainment Industry Group Ltd (1803.HK) is 8.5%.

The Cost of Equity of Beijing Sports and Entertainment Industry Group Ltd (1803.HK) is 9.60%.

The Cost of Debt of Beijing Sports and Entertainment Industry Group Ltd (1803.HK) is 5.95%.

	Range	Selected
Cost of equity	6.70% - 12.50%	9.60%
Tax rate	4.50% - 6.40%	5.45%
Cost of debt	4.90% - 7.00%	5.95%
WACC	6.2% - 10.9%	8.5%

WACC

1803.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.64	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	12.50%

Tax rate	4.50%	6.40%
Debt/Equity ratio	0.37	0.37
Cost of debt	4.90%	7.00%

After-tax WACC	6.2%	10.9%


Selected WACC	8.5%

1803.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 1803.HK:

cost_of_equity (9.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.