234.HK WACC - Weighted Average Cost of Capital

The WACC of New Century Group Hong Kong Ltd (234.HK) is 7.5%.

The Cost of Equity of New Century Group Hong Kong Ltd (234.HK) is 8.75%.

The Cost of Debt of New Century Group Hong Kong Ltd (234.HK) is 5.50%.

	Range	Selected
Cost of equity	7.70% - 9.80%	8.75%
Tax rate	11.30% - 12.10%	11.70%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.4% - 8.7%	7.5%

WACC

234.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.8	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	9.80%

Tax rate	11.30%	12.10%
Debt/Equity ratio	0.45	0.45
Cost of debt	4.00%	7.00%

After-tax WACC	6.4%	8.7%


Selected WACC	7.5%

234.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 234.HK:

cost_of_equity (8.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.8) + 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.