3822.HK WACC - Weighted Average Cost of Capital

The WACC of Sam Woo Construction Group Ltd (3822.HK) is 8.1%.

The Cost of Equity of Sam Woo Construction Group Ltd (3822.HK) is 4.20%.

The Cost of Debt of Sam Woo Construction Group Ltd (3822.HK) is 9.30%.

	Range	Selected
Cost of equity	3.10% - 5.30%	4.20%
Tax rate	3.80% - 5.60%	4.70%
Cost of debt	4.00% - 14.60%	9.30%
WACC	3.7% - 12.4%	8.1%

WACC

3822.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.04	0.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	3.10%	5.30%

Tax rate	3.80%	5.60%
Debt/Equity ratio	4.91	4.91
Cost of debt	4.00%	14.60%

After-tax WACC	3.7%	12.4%


Selected WACC	8.1%

3822.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 3822.HK:

cost_of_equity (4.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.04) + 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.