1979.HK WACC - Weighted Average Cost of Capital
The WACC of Ten Pao Group Holdings Ltd (1979.HK) is 8.8%.
| Range | Selected | |
| Cost of equity | 8.4% - 13.7% | 11.05% |
| Tax rate | 15.2% - 15.5% | 15.35% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.9% - 10.7% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.93 | 1.4 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 13.7% |
| Tax rate | 15.2% | 15.5% |
| Debt/Equity ratio | 0.43 | 0.43 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.9% | 10.7% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1979.HK | Ten Pao Group Holdings Ltd | 0.43 | 0.78 | 0.58 |
| 1201.HK | Tesson Holdings Ltd | 0.29 | 2.09 | 1.67 |
| 1729.HK | Time Interconnect Technology Ltd | 0.17 | 0.81 | 0.71 |
| 1750.HK | REM Group (Holdings) Ltd | 0.05 | 1.3 | 1.26 |
| 1868.HK | Neo-Neon Holdings Ltd | 0.07 | 0.17 | 0.16 |
| 3919.HK | Golden Power Group Holdings Ltd | 7.68 | 1.33 | 0.18 |
| 603366.SS | Solareast Holdings Co Ltd | 0.12 | 1.3 | 1.18 |
| 6986.T | Futaba Corp | 0.03 | 1.2 | 1.17 |
| 725.HK | Perennial International Ltd | 0 | 0.07 | 0.07 |
| KEI.NS | KEI Industries Ltd | 0.01 | 1.3 | 1.29 |
| Low | High | |
| Unlevered beta | 0.66 | 1.17 |
| Relevered beta | 0.9 | 1.6 |
| Adjusted relevered beta | 0.93 | 1.4 |
1979.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 1979.HK:
cost_of_equity (11.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.93) + 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.