1856.HK WACC - Weighted Average Cost of Capital
The WACC of Ernest Borel Holdings Ltd (1856.HK) is 6.9%.
| Range | Selected | |
| Cost of equity | 5.3% - 6.8% | 6.05% |
| Tax rate | 2.0% - 4.9% | 3.45% |
| Cost of debt | 7.0% - 9.5% | 8.25% |
| WACC | 6.0% - 7.8% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.33 | 0.35 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.3% | 6.8% |
| Tax rate | 2.0% | 4.9% |
| Debt/Equity ratio | 0.8 | 0.8 |
| Cost of debt | 7.0% | 9.5% |
| After-tax WACC | 6.0% | 7.8% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1856.HK | Ernest Borel Holdings Ltd | 0.8 | -0.14 | -0.08 |
| 122.HK | Crocodile Garments Ltd | 4.96 | -0.1 | -0.02 |
| 1520.HK | CEFC Hong Kong Financial Investment Company Ltd | 0.05 | -0.72 | -0.68 |
| 1825.HK | Sterling Group Holdings Ltd | 3.63 | 0.04 | 0.01 |
| 2011.HK | China Apex Group Ltd | 0.26 | 0.03 | 0.02 |
| 213.HK | National Electronics Holdings Ltd | 14.39 | 0.25 | 0.02 |
| 475.HK | Central Development Holdings Ltd | 0.66 | -0.37 | -0.23 |
| 8195.HK | L & A International Holdings Ltd | 0.06 | 0.34 | 0.32 |
| 8297.HK | My Heart Bodibra Group Ltd | 0.11 | 0.52 | 0.47 |
| 907.HK | Elegance Optical International Holdings Ltd | 0.15 | 1.18 | 1.03 |
| Low | High | |
| Unlevered beta | 0 | 0.02 |
| Relevered beta | 0 | 0.03 |
| Adjusted relevered beta | 0.33 | 0.35 |
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.