312.HK WACC - Weighted Average Cost of Capital

The WACC of Shirble Department Store Holdings China Ltd (312.HK) is 8.5%.

The Cost of Equity of Shirble Department Store Holdings China Ltd (312.HK) is 42.25%.

The Cost of Debt of Shirble Department Store Holdings China Ltd (312.HK) is 5.60%.

	Range	Selected
Cost of equity	36.30% - 48.20%	42.25%
Tax rate	12.00% - 15.00%	13.50%
Cost of debt	4.70% - 6.50%	5.60%
WACC	7.3% - 9.7%	8.5%

WACC

312.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	5.59	6.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	36.30%	48.20%

Tax rate	12.00%	15.00%
Debt/Equity ratio	9.05	9.05
Cost of debt	4.70%	6.50%

After-tax WACC	7.3%	9.7%


Selected WACC	8.5%

312.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 312.HK:

cost_of_equity (42.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (5.59) + 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.