3396.HK WACC - Weighted Average Cost of Capital

The WACC of Legend Holdings Corp (3396.HK) is 7.4%.

The Cost of Equity of Legend Holdings Corp (3396.HK) is 19.30%.

The Cost of Debt of Legend Holdings Corp (3396.HK) is 7.35%.

	Range	Selected
Cost of equity	11.20% - 27.40%	19.30%
Tax rate	24.10% - 27.40%	25.75%
Cost of debt	6.60% - 8.10%	7.35%
WACC	5.9% - 8.9%	7.4%

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	1.4	3.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	27.40%

Tax rate	24.10%	27.40%
Debt/Equity ratio	6.18	6.18
Cost of debt	6.60%	8.10%

After-tax WACC	5.9%	8.9%


Selected WACC	7.4%

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 (19.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.4) + 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.