1975.HK WACC - Weighted Average Cost of Capital

The WACC of Sun Hing Printing Holdings Ltd (1975.HK) is 10.4%.

The Cost of Equity of Sun Hing Printing Holdings Ltd (1975.HK) is 6.60%.

The Cost of Debt of Sun Hing Printing Holdings Ltd (1975.HK) is 19.95%.

	Range	Selected
Cost of equity	5.50% - 7.70%	6.60%
Tax rate	16.80% - 17.70%	17.25%
Cost of debt	19.90% - 20.00%	19.95%
WACC	9.7% - 11.0%	10.4%

WACC

1975.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.44	0.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	7.70%

Tax rate	16.80%	17.70%
Debt/Equity ratio	0.62	0.62
Cost of debt	19.90%	20.00%

After-tax WACC	9.7%	11.0%


Selected WACC	10.4%

1975.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 1975.HK:

cost_of_equity (6.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.