2528.HK WACC - Weighted Average Cost of Capital

The WACC of Forward Fashion (International) Holdings Co Ltd (2528.HK) is 7.5%.

The Cost of Equity of Forward Fashion (International) Holdings Co Ltd (2528.HK) is 13.55%.

The Cost of Debt of Forward Fashion (International) Holdings Co Ltd (2528.HK) is 5.50%.

	Range	Selected
Cost of equity	9.10% - 18.00%	13.55%
Tax rate	5.60% - 7.00%	6.30%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.3% - 9.8%	7.5%

WACC

2528.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.04	2.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	18.00%

Tax rate	5.60%	7.00%
Debt/Equity ratio	2.51	2.51
Cost of debt	4.00%	7.00%

After-tax WACC	5.3%	9.8%


Selected WACC	7.5%

2528.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 2528.HK:

cost_of_equity (13.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.04) + 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.