2307.HK WACC - Weighted Average Cost of Capital

The WACC of Kam Hing International Holdings Ltd (2307.HK) is 7.6%.

The Cost of Equity of Kam Hing International Holdings Ltd (2307.HK) is 18.75%.

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

	Range	Selected
Cost of equity	13.50% - 24.00%	18.75%
Tax rate	11.20% - 17.10%	14.15%
Cost of debt	4.00% - 8.10%	6.05%
WACC	5.4% - 9.9%	7.6%

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	1.78	2.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.50%	24.00%

Tax rate	11.20%	17.10%
Debt/Equity ratio	4.42	4.42
Cost of debt	4.00%	8.10%

After-tax WACC	5.4%	9.9%


Selected WACC	7.6%

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 (18.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.78) + 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.