381.HK WACC - Weighted Average Cost of Capital

The WACC of Kiu Hung International Holdings Ltd (381.HK) is 7.1%.

The Cost of Equity of Kiu Hung International Holdings Ltd (381.HK) is 9.65%.

The Cost of Debt of Kiu Hung International Holdings Ltd (381.HK) is 4.25%.

	Range	Selected
Cost of equity	7.70% - 11.60%	9.65%
Tax rate	1.10% - 2.80%	1.95%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.9% - 8.2%	7.1%

WACC

381.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.81	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	11.60%

Tax rate	1.10%	2.80%
Debt/Equity ratio	0.89	0.89
Cost of debt	4.00%	4.50%

After-tax WACC	5.9%	8.2%


Selected WACC	7.1%

381.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 381.HK:

cost_of_equity (9.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.81) + 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.