2136.HK WACC - Weighted Average Cost of Capital

The WACC of Lifestyle China Group Ltd (2136.HK) is 9.1%.

The Cost of Equity of Lifestyle China Group Ltd (2136.HK) is 6.65%.

The Cost of Debt of Lifestyle China Group Ltd (2136.HK) is 13.95%.

	Range	Selected
Cost of equity	5.70% - 7.60%	6.65%
Tax rate	25.70% - 32.80%	29.25%
Cost of debt	5.00% - 22.90%	13.95%
WACC	4.0% - 14.2%	9.1%

WACC

2136.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.47	0.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	7.60%

Tax rate	25.70%	32.80%
Debt/Equity ratio	5.52	5.52
Cost of debt	5.00%	22.90%

After-tax WACC	4.0%	14.2%


Selected WACC	9.1%

2136.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 2136.HK:

cost_of_equity (6.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.47) + 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.