2125.HK WACC - Weighted Average Cost of Capital

The WACC of Strawbear Entertainment Group (2125.HK) is 9.5%.

The Cost of Equity of Strawbear Entertainment Group (2125.HK) is 13.70%.

The Cost of Debt of Strawbear Entertainment Group (2125.HK) is 6.95%.

	Range	Selected
Cost of equity	11.70% - 15.70%	13.70%
Tax rate	34.00% - 46.50%	40.25%
Cost of debt	5.10% - 8.80%	6.95%
WACC	8.1% - 10.9%	9.5%

WACC

2125.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.48	1.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.70%	15.70%

Tax rate	34.00%	46.50%
Debt/Equity ratio	0.78	0.78
Cost of debt	5.10%	8.80%

After-tax WACC	8.1%	10.9%


Selected WACC	9.5%

2125.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 2125.HK:

cost_of_equity (13.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.48) + 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.