1825.HK
Sterling Group Holdings Ltd
Price:  
0.11 
HKD
Volume:  
217,500.00
Hong Kong | Textiles, Apparel & Luxury Goods
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1825.HK WACC - Weighted Average Cost of Capital

The WACC of Sterling Group Holdings Ltd (1825.HK) is 9.6%.

The Cost of Equity of Sterling Group Holdings Ltd (1825.HK) is 13.15%.
The Cost of Debt of Sterling Group Holdings Ltd (1825.HK) is 9.30%.

Range Selected
Cost of equity 9.30% - 17.00% 13.15%
Tax rate 5.00% - 9.30% 7.15%
Cost of debt 4.00% - 14.60% 9.30%
WACC 5.1% - 14.2% 9.6%
WACC

1825.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.08 1.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.30% 17.00%
Tax rate 5.00% 9.30%
Debt/Equity ratio 3.16 3.16
Cost of debt 4.00% 14.60%
After-tax WACC 5.1% 14.2%
Selected WACC 9.6%

1825.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 1825.HK:

cost_of_equity (13.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.08) + 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.