253.HK WACC - Weighted Average Cost of Capital

The WACC of Shun Ho Holdings Ltd (253.HK) is 6.9%.

The Cost of Equity of Shun Ho Holdings Ltd (253.HK) is 18.80%.

The Cost of Debt of Shun Ho Holdings Ltd (253.HK) is 6.05%.

	Range	Selected
Cost of equity	13.00% - 24.60%	18.80%
Tax rate	6.90% - 14.80%	10.85%
Cost of debt	4.00% - 8.10%	6.05%
WACC	4.8% - 9.0%	6.9%

WACC

253.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.7	2.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.00%	24.60%

Tax rate	6.90%	14.80%
Debt/Equity ratio	7.38	7.38
Cost of debt	4.00%	8.10%

After-tax WACC	4.8%	9.0%


Selected WACC	6.9%

253.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 253.HK:

cost_of_equity (18.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.7) + 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.