1820.HK WACC - Weighted Average Cost of Capital

The WACC of Pacific Millennium Packaging Group Corp (1820.HK) is 11.1%.

The Cost of Equity of Pacific Millennium Packaging Group Corp (1820.HK) is 13.80%.

The Cost of Debt of Pacific Millennium Packaging Group Corp (1820.HK) is 12.35%.

	Range	Selected
Cost of equity	12.00% - 15.60%	13.80%
Tax rate	30.40% - 34.10%	32.25%
Cost of debt	4.80% - 19.90%	12.35%
WACC	7.9% - 14.4%	11.1%

WACC

1820.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.53	1.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.00%	15.60%

Tax rate	30.40%	34.10%
Debt/Equity ratio	0.9	0.9
Cost of debt	4.80%	19.90%

After-tax WACC	7.9%	14.4%


Selected WACC	11.1%

1820.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 1820.HK:

cost_of_equity (13.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.53) + 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.