1891.HK WACC - Weighted Average Cost of Capital

The WACC of Heng Hup Holdings Ltd (1891.HK) is 5.0%.

The Cost of Equity of Heng Hup Holdings Ltd (1891.HK) is 7.95%.

The Cost of Debt of Heng Hup Holdings Ltd (1891.HK) is 4.35%.

	Range	Selected
Cost of equity	6.50% - 9.40%	7.95%
Tax rate	37.30% - 40.50%	38.90%
Cost of debt	4.10% - 4.60%	4.35%
WACC	4.3% - 5.8%	5.0%

WACC

1891.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.6	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	9.40%

Tax rate	37.30%	40.50%
Debt/Equity ratio	1.21	1.21
Cost of debt	4.10%	4.60%

After-tax WACC	4.3%	5.8%


Selected WACC	5.0%

1891.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 1891.HK:

cost_of_equity (7.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.6) + 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.