3918.HK WACC - Weighted Average Cost of Capital

The WACC of Nagacorp Ltd (3918.HK) is 8.6%.

The Cost of Equity of Nagacorp Ltd (3918.HK) is 8.80%.

The Cost of Debt of Nagacorp Ltd (3918.HK) is 5.45%.

	Range	Selected
Cost of equity	7.20% - 10.40%	8.80%
Tax rate	0.20% - 0.40%	0.30%
Cost of debt	4.00% - 6.90%	5.45%
WACC	7.0% - 10.2%	8.6%

WACC

3918.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.72	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	10.40%

Tax rate	0.20%	0.40%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	6.90%

After-tax WACC	7.0%	10.2%


Selected WACC	8.6%

3918.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 3918.HK:

cost_of_equity (8.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.72) + 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.