2307.HK WACC - Weighted Average Cost of Capital

The WACC of Kam Hing International Holdings Ltd (2307.HK) is 6.7%.

The Cost of Equity of Kam Hing International Holdings Ltd (2307.HK) is 17.80%.

The Cost of Debt of Kam Hing International Holdings Ltd (2307.HK) is 6.05%.

	Range	Selected
Cost of equity	11.00% - 24.60%	17.80%
Tax rate	11.20% - 17.10%	14.15%
Cost of debt	4.00% - 8.10%	6.05%
WACC	4.5% - 8.9%	6.7%

WACC

2307.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.37	2.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	24.60%

Tax rate	11.20%	17.10%
Debt/Equity ratio	7.05	7.05
Cost of debt	4.00%	8.10%

After-tax WACC	4.5%	8.9%


Selected WACC	6.7%

2307.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 2307.HK:

cost_of_equity (17.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.37) + 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.