1891.HK WACC - Weighted Average Cost of Capital

The WACC of Heng Hup Holdings Ltd (1891.HK) is 6.1%.

The Cost of Equity of Heng Hup Holdings Ltd (1891.HK) is 10.20%.

The Cost of Debt of Heng Hup Holdings Ltd (1891.HK) is 5.35%.

	Range	Selected
Cost of equity	8.10% - 12.30%	10.20%
Tax rate	34.20% - 37.70%	35.95%
Cost of debt	4.00% - 6.70%	5.35%
WACC	4.8% - 7.4%	6.1%

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	0.88	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	12.30%

Tax rate	34.20%	37.70%
Debt/Equity ratio	1.52	1.52
Cost of debt	4.00%	6.70%

After-tax WACC	4.8%	7.4%


Selected WACC	6.1%

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 (10.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.88) + 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.