185.HK WACC - Weighted Average Cost of Capital

The WACC of Zensun Enterprises Ltd (185.HK) is 4.5%.

The Cost of Equity of Zensun Enterprises Ltd (185.HK) is 46.25%.

The Cost of Debt of Zensun Enterprises Ltd (185.HK) is 6.40%.

	Range	Selected
Cost of equity	32.50% - 60.00%	46.25%
Tax rate	33.50% - 38.40%	35.95%
Cost of debt	5.80% - 7.00%	6.40%
WACC	4.1% - 4.8%	4.5%

WACC

185.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	4.95	8.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	32.50%	60.00%

Tax rate	33.50%	38.40%
Debt/Equity ratio	105.08	105.08
Cost of debt	5.80%	7.00%

After-tax WACC	4.1%	4.8%


Selected WACC	4.5%

185.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 185.HK:

cost_of_equity (46.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.95) + 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.