242.HK
Shun Tak Holdings Ltd
Price:  
0.62 
HKD
Volume:  
1,530,000
Hong Kong | Industrial Conglomerates

242.HK WACC - Weighted Average Cost of Capital

The WACC of Shun Tak Holdings Ltd (242.HK) is 7.8%.

The Cost of Equity of Shun Tak Holdings Ltd (242.HK) is 11.1%.
The Cost of Debt of Shun Tak Holdings Ltd (242.HK) is 9.3%.

RangeSelected
Cost of equity8.5% - 13.7%11.1%
Tax rate16.4% - 22.4%19.4%
Cost of debt4.0% - 14.6%9.3%
WACC3.9% - 11.6%7.8%
WACC

242.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.941.41
Additional risk adjustments0.0%0.5%
Cost of equity8.5%13.7%
Tax rate16.4%22.4%
Debt/Equity ratio
8.38.3
Cost of debt4.0%14.6%
After-tax WACC3.9%11.6%
Selected WACC7.8%

242.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 242.HK:

cost_of_equity (11.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.94) + 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.