190.HK WACC - Weighted Average Cost of Capital

The WACC of HKC (Holdings) Ltd (190.HK) is 6.6%.

The Cost of Equity of HKC (Holdings) Ltd (190.HK) is 8.05%.

The Cost of Debt of HKC (Holdings) Ltd (190.HK) is 6.45%.

	Range	Selected
Cost of equity	6.90% - 9.20%	8.05%
Tax rate	23.90% - 25.70%	24.80%
Cost of debt	5.80% - 7.10%	6.45%
WACC	5.7% - 7.4%	6.6%

WACC

190.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.72	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	9.20%

Tax rate	23.90%	25.70%
Debt/Equity ratio	0.85	0.85
Cost of debt	5.80%	7.10%

After-tax WACC	5.7%	7.4%


Selected WACC	6.6%

190.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 190.HK:

cost_of_equity (8.05%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.72) + 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.