The WACC of Shun Tak Holdings Ltd (242.HK) is 7.8%.
Range | Selected | |
Cost of equity | 8.5% - 13.7% | 11.1% |
Tax rate | 16.4% - 22.4% | 19.4% |
Cost of debt | 4.0% - 14.6% | 9.3% |
WACC | 3.9% - 11.6% | 7.8% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.94 | 1.41 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.5% | 13.7% |
Tax rate | 16.4% | 22.4% |
Debt/Equity ratio | 8.3 | 8.3 |
Cost of debt | 4.0% | 14.6% |
After-tax WACC | 3.9% | 11.6% |
Selected WACC | 7.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
242.HK | Shun Tak Holdings Ltd | 8.3 | 0.79 | 0.1 |
000009.SZ | China Baoan Group Co Ltd | 0.88 | 1.32 | 0.77 |
138.HK | CCT Fortis Holdings Ltd | 14.24 | -0.13 | -0.01 |
25.HK | Chevalier International Holdings Ltd | 3.79 | 0.29 | 0.07 |
3232.T | Mie Kotsu Group Holdings Inc | 1.48 | 0.53 | 0.24 |
363.HK | Shanghai Industrial Holdings Ltd | 3.88 | 0.54 | 0.13 |
53.HK | Guoco Group Ltd | 1.97 | 0.25 | 0.09 |
659.HK | NWS Holdings Ltd | 1.02 | 0.34 | 0.19 |
ARAD.TA | Arad Investment & Industrial Development Ltd | 0.87 | 1.49 | 0.87 |
REE.VN | Refrigeration Electrical Engineering Corp | 0.31 | 0.82 | 0.66 |
Low | High | |
Unlevered beta | 0.12 | 0.21 |
Relevered beta | 0.91 | 1.61 |
Adjusted relevered beta | 0.94 | 1.41 |
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.