The WACC of Wealthy Way Group Ltd (3848.HK) is 6.1%.
Range | Selected | |
Cost of equity | 5.1% - 7.4% | 6.25% |
Tax rate | 27.9% - 30.6% | 29.25% |
Cost of debt | 5.3% - 6.5% | 5.9% |
WACC | 5.0% - 7.1% | 6.1% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.37 | 0.51 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.1% | 7.4% |
Tax rate | 27.9% | 30.6% |
Debt/Equity ratio | 0.1 | 0.1 |
Cost of debt | 5.3% | 6.5% |
After-tax WACC | 5.0% | 7.1% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
3848.HK | Wealthy Way Group Ltd | 0.1 | 0.99 | 0.92 |
3360.HK | Far East Horizon Ltd | 11.7 | 0.46 | 0.05 |
3623.HK | China Success Finance Group Holdings Ltd | 0.27 | 0.58 | 0.49 |
379.HK | China Ever Grand Financial Leasing Group Co Ltd | 0.08 | 1.01 | 0.96 |
508.HK | Dingyi Group Investment Ltd | 3.26 | 0.19 | 0.06 |
530879.BO | Capital India Finance Ltd | 0.65 | 0.83 | 0.57 |
538732.BO | Vibrant Global Capital Ltd | 0.3 | 0.11 | 0.09 |
629.HK | Yue Da International Holdings Ltd | 0.32 | 0.01 | 0.01 |
668.HK | Doyen International Holdings Ltd | 0.01 | 0.05 | 0.05 |
I49.SI | IFS Capital Ltd | 3.6 | 0.22 | 0.06 |
Low | High | |
Unlevered beta | 0.06 | 0.25 |
Relevered beta | 0.06 | 0.27 |
Adjusted relevered beta | 0.37 | 0.51 |
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 (6.25%) = 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.