2663.HK WACC - Weighted Average Cost of Capital

The WACC of KPA-BM Holdings Ltd (2663.HK) is 7.1%.

The Cost of Equity of KPA-BM Holdings Ltd (2663.HK) is 7.15%.

The Cost of Debt of KPA-BM Holdings Ltd (2663.HK) is 7.80%.

	Range	Selected
Cost of equity	5.50% - 8.80%	7.15%
Tax rate	16.20% - 17.30%	16.75%
Cost of debt	7.00% - 8.60%	7.80%
WACC	5.6% - 8.6%	7.1%

WACC

2663.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.45	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	8.80%

Tax rate	16.20%	17.30%
Debt/Equity ratio	0.11	0.11
Cost of debt	7.00%	8.60%

After-tax WACC	5.6%	8.6%


Selected WACC	7.1%

2663.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 2663.HK:

cost_of_equity (7.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.