2298.HK WACC - Weighted Average Cost of Capital

The WACC of Cosmo Lady (China) Holdings Co Ltd (2298.HK) is 9.1%.

The Cost of Equity of Cosmo Lady (China) Holdings Co Ltd (2298.HK) is 14.95%.

The Cost of Debt of Cosmo Lady (China) Holdings Co Ltd (2298.HK) is 5.50%.

	Range	Selected
Cost of equity	12.50% - 17.40%	14.95%
Tax rate	15.30% - 15.80%	15.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.3% - 10.9%	9.1%

WACC

2298.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.62	1.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	17.40%

Tax rate	15.30%	15.80%
Debt/Equity ratio	1.32	1.32
Cost of debt	4.00%	7.00%

After-tax WACC	7.3%	10.9%


Selected WACC	9.1%

2298.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 2298.HK:

cost_of_equity (14.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.62) + 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.