2528.HK WACC - Weighted Average Cost of Capital

The WACC of Forward Fashion (International) Holdings Co Ltd (2528.HK) is 11.0%.

The Cost of Equity of Forward Fashion (International) Holdings Co Ltd (2528.HK) is 7.05%.

The Cost of Debt of Forward Fashion (International) Holdings Co Ltd (2528.HK) is 13.45%.

	Range	Selected
Cost of equity	5.80% - 8.30%	7.05%
Tax rate	5.60% - 7.00%	6.30%
Cost of debt	4.00% - 22.90%	13.45%
WACC	4.3% - 17.7%	11.0%

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	0.49	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	8.30%

Tax rate	5.60%	7.00%
Debt/Equity ratio	2.59	2.59
Cost of debt	4.00%	22.90%

After-tax WACC	4.3%	17.7%


Selected WACC	11.0%

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 (7.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.