2189.HK
Kato Hong Kong Holdings Ltd
Price:  
0.45 
HKD
Volume:  
60,000
Hong Kong | Health Care Providers & Services

2189.HK WACC - Weighted Average Cost of Capital

The WACC of Kato Hong Kong Holdings Ltd (2189.HK) is 6.1%.

The Cost of Equity of Kato Hong Kong Holdings Ltd (2189.HK) is 8.35%.
The Cost of Debt of Kato Hong Kong Holdings Ltd (2189.HK) is 4.25%.

RangeSelected
Cost of equity6.2% - 10.5%8.35%
Tax rate15.4% - 16.5%15.95%
Cost of debt4.0% - 4.5%4.25%
WACC4.9% - 7.4%6.1%
WACC

2189.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.550.95
Additional risk adjustments0.0%0.5%
Cost of equity6.2%10.5%
Tax rate15.4%16.5%
Debt/Equity ratio
0.850.85
Cost of debt4.0%4.5%
After-tax WACC4.9%7.4%
Selected WACC6.1%

2189.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 2189.HK:

cost_of_equity (8.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.