1909.HK WACC - Weighted Average Cost of Capital

The WACC of Fire Rock Holdings Ltd (1909.HK) is 10.2%.

The Cost of Equity of Fire Rock Holdings Ltd (1909.HK) is 10.25%.

The Cost of Debt of Fire Rock Holdings Ltd (1909.HK) is 4.25%.

	Range	Selected
Cost of equity	7.90% - 12.60%	10.25%
Tax rate	14.10% - 18.50%	16.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.8% - 12.6%	10.2%

WACC

1909.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.84	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	12.60%

Tax rate	14.10%	18.50%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	4.50%

After-tax WACC	7.8%	12.6%


Selected WACC	10.2%

1909.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 1909.HK:

cost_of_equity (10.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.84) + 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.