1856.HK
Ernest Borel Holdings Ltd
Price:  
0.99 
HKD
Volume:  
5,000
Hong Kong | Textiles, Apparel & Luxury Goods

1856.HK WACC - Weighted Average Cost of Capital

The WACC of Ernest Borel Holdings Ltd (1856.HK) is 7.0%.

The Cost of Equity of Ernest Borel Holdings Ltd (1856.HK) is 6.05%.
The Cost of Debt of Ernest Borel Holdings Ltd (1856.HK) is 8.25%.

RangeSelected
Cost of equity5.3% - 6.8%6.05%
Tax rate2.0% - 4.9%3.45%
Cost of debt7.0% - 9.5%8.25%
WACC6.1% - 7.9%7.0%
WACC

1856.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.330.35
Additional risk adjustments0.5%1.0%
Cost of equity5.3%6.8%
Tax rate2.0%4.9%
Debt/Equity ratio
0.990.99
Cost of debt7.0%9.5%
After-tax WACC6.1%7.9%
Selected WACC7.0%

1856.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 1856.HK:

cost_of_equity (6.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.