1888.HK WACC - Weighted Average Cost of Capital

The WACC of Kingboard Laminates Holdings Ltd (1888.HK) is 6.6%.

The Cost of Equity of Kingboard Laminates Holdings Ltd (1888.HK) is 6.90%.

The Cost of Debt of Kingboard Laminates Holdings Ltd (1888.HK) is 6.05%.

	Range	Selected
Cost of equity	5.60% - 8.20%	6.90%
Tax rate	23.30% - 23.50%	23.40%
Cost of debt	4.00% - 8.10%	6.05%
WACC	5.3% - 8.0%	6.6%

WACC

1888.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.45	0.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	8.20%

Tax rate	23.30%	23.50%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.00%	8.10%

After-tax WACC	5.3%	8.0%


Selected WACC	6.6%

1888.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 1888.HK:

cost_of_equity (6.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.