The WACC of OneForce Holdings Ltd (1933.HK) is 9.2%.
| Range | Selected | |
| Cost of equity | 10.40% - 17.80% | 14.10% |
| Tax rate | 3.30% - 8.40% | 5.85% |
| Cost of debt | 7.00% - 8.20% | 7.60% |
| WACC | 7.8% - 10.6% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.25 | 1.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.40% | 17.80% |
| Tax rate | 3.30% | 8.40% |
| Debt/Equity ratio | 2.36 | 2.36 |
| Cost of debt | 7.00% | 8.20% |
| After-tax WACC | 7.8% | 10.6% |
| Selected WACC | 9.2% | |
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 1933.HK:
cost_of_equity (14.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.25) + 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.