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 15.90%.

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

	Range	Selected
Cost of equity	7.40% - 24.40%	15.90%
Tax rate	1.00% - 1.30%	1.15%
Cost of debt	4.90% - 7.00%	5.95%
WACC	5.2% - 9.5%	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	0.76	2.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	24.40%

Tax rate	1.00%	1.30%
Debt/Equity ratio	5.83	5.83
Cost of debt	4.90%	7.00%

After-tax WACC	5.2%	9.5%


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 (15.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.76) + 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.