306.HK
Kwoon Chung Bus Holdings Ltd
Price:  
1.85 
HKD
Volume:  
64,529
Hong Kong | Road & Rail

306.HK WACC - Weighted Average Cost of Capital

The WACC of Kwoon Chung Bus Holdings Ltd (306.HK) is 7.0%.

The Cost of Equity of Kwoon Chung Bus Holdings Ltd (306.HK) is 11.25%.
The Cost of Debt of Kwoon Chung Bus Holdings Ltd (306.HK) is 5.25%.

RangeSelected
Cost of equity8.2% - 14.3%11.25%
Tax rate6.0% - 14.4%10.2%
Cost of debt4.0% - 6.5%5.25%
WACC5.3% - 8.6%7.0%
WACC

306.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.891.49
Additional risk adjustments0.0%0.5%
Cost of equity8.2%14.3%
Tax rate6.0%14.4%
Debt/Equity ratio
1.871.87
Cost of debt4.0%6.5%
After-tax WACC5.3%8.6%
Selected WACC7.0%

306.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 306.HK:

cost_of_equity (11.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.89) + 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.