2122.HK WACC - Weighted Average Cost of Capital

The WACC of Kidsland International Holdings Ltd (2122.HK) is 7.3%.

The Cost of Equity of Kidsland International Holdings Ltd (2122.HK) is 14.95%.

The Cost of Debt of Kidsland International Holdings Ltd (2122.HK) is 5.95%.

	Range	Selected
Cost of equity	7.60% - 22.30%	14.95%
Tax rate	1.00% - 1.30%	1.15%
Cost of debt	4.90% - 7.00%	5.95%
WACC	5.3% - 9.3%	7.3%

WACC

2122.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.8	2.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	22.30%

Tax rate	1.00%	1.30%
Debt/Equity ratio	5.35	5.35
Cost of debt	4.90%	7.00%

After-tax WACC	5.3%	9.3%


Selected WACC	7.3%

2122.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 2122.HK:

cost_of_equity (14.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.8) + 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.