3396.HK WACC - Weighted Average Cost of Capital

The WACC of Legend Holdings Corp (3396.HK) is 10.8%.

The Cost of Equity of Legend Holdings Corp (3396.HK) is 36.25%.

The Cost of Debt of Legend Holdings Corp (3396.HK) is 10.25%.

	Range	Selected
Cost of equity	32.00% - 40.50%	36.25%
Tax rate	24.10% - 27.90%	26.00%
Cost of debt	5.90% - 14.60%	10.25%
WACC	7.6% - 14.0%	10.8%

WACC

3396.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	4.88	5.24

Additional risk adjustments	0.0%	0.5%
Cost of equity	32.00%	40.50%

Tax rate	24.10%	27.90%
Debt/Equity ratio	7.75	7.75
Cost of debt	5.90%	14.60%

After-tax WACC	7.6%	14.0%


Selected WACC	10.8%

3396.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 3396.HK:

cost_of_equity (36.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.88) + 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.