The WACC of Kato Hong Kong Holdings Ltd (2189.HK) is 6.1%.
Range | Selected | |
Cost of equity | 6.2% - 10.5% | 8.35% |
Tax rate | 15.4% - 16.5% | 15.95% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.9% - 7.4% | 6.1% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.55 | 0.95 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.2% | 10.5% |
Tax rate | 15.4% | 16.5% |
Debt/Equity ratio | 0.85 | 0.85 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.9% | 7.4% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2189.HK | Kato Hong Kong Holdings Ltd | 0.85 | 0.09 | 0.05 |
1D8.SI | Singapore O&G Ltd | 0.02 | 1.06 | 1.04 |
524520.BO | KMC Speciality Hospitals India Ltd | 0.08 | 0.65 | 0.61 |
539428.BO | Tejnaksh Healthcare Ltd | 0.02 | 1.02 | 1.01 |
6545.T | Internet Infinity Inc | 0.42 | 0.66 | 0.49 |
722.HK | UMP Healthcare Holdings Ltd | 0.45 | 0.14 | 0.1 |
8143.HK | Good Fellow Healthcare Holdings Ltd | 0.08 | 0.18 | 0.17 |
8405.HK | Hang Chi Holdings Ltd | 0.29 | 0.08 | 0.07 |
LOTUSEYE.NS | Lotus Eye Hospital and Institute Ltd | 0.02 | 1.38 | 1.35 |
RPH.BK | Ratchaphruek Hospital PCL | 0 | 0.2 | 0.2 |
Low | High | |
Unlevered beta | 0.19 | 0.54 |
Relevered beta | 0.33 | 0.93 |
Adjusted relevered beta | 0.55 | 0.95 |
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.