1841.HK WACC - Weighted Average Cost of Capital

The WACC of A.Plus Group Holdings Ltd (1841.HK) is 7.4%.

The Cost of Equity of A.Plus Group Holdings Ltd (1841.HK) is 7.55%.

The Cost of Debt of A.Plus Group Holdings Ltd (1841.HK) is 7.30%.

	Range	Selected
Cost of equity	5.50% - 9.60%	7.55%
Tax rate	13.40% - 14.20%	13.80%
Cost of debt	4.00% - 10.60%	7.30%
WACC	5.3% - 9.6%	7.4%

WACC

1841.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.43	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	9.60%

Tax rate	13.40%	14.20%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	10.60%

After-tax WACC	5.3%	9.6%


Selected WACC	7.4%

1841.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 1841.HK:

cost_of_equity (7.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.