2223.HK WACC - Weighted Average Cost of Capital

The WACC of Casablanca Group Ltd (2223.HK) is 5.8%.

The Cost of Equity of Casablanca Group Ltd (2223.HK) is 5.95%.

The Cost of Debt of Casablanca Group Ltd (2223.HK) is 6.60%.

	Range	Selected
Cost of equity	5.00% - 6.90%	5.95%
Tax rate	13.50% - 19.60%	16.55%
Cost of debt	6.20% - 7.00%	6.60%
WACC	5.1% - 6.5%	5.8%

WACC

2223.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.28	0.36

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.00%	6.90%

Tax rate	13.50%	19.60%
Debt/Equity ratio	0.37	0.37
Cost of debt	6.20%	7.00%

After-tax WACC	5.1%	6.5%


Selected WACC	5.8%

2223.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 2223.HK:

cost_of_equity (5.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.28) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.