3848.HK WACC - Weighted Average Cost of Capital

The WACC of Wealthy Way Group Ltd (3848.HK) is 6.1%.

The Cost of Equity of Wealthy Way Group Ltd (3848.HK) is 6.30%.

The Cost of Debt of Wealthy Way Group Ltd (3848.HK) is 5.90%.

	Range	Selected
Cost of equity	5.10% - 7.50%	6.30%
Tax rate	27.90% - 30.60%	29.25%
Cost of debt	5.30% - 6.50%	5.90%
WACC	5.0% - 7.2%	6.1%

WACC

3848.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.37	0.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	7.50%

Tax rate	27.90%	30.60%
Debt/Equity ratio	0.1	0.1
Cost of debt	5.30%	6.50%

After-tax WACC	5.0%	7.2%


Selected WACC	6.1%

3848.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 3848.HK:

cost_of_equity (6.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.