40.HK WACC - Weighted Average Cost of Capital

The WACC of Gold Peak Industries Holdings Ltd (40.HK) is 8.9%.

The Cost of Equity of Gold Peak Industries Holdings Ltd (40.HK) is 28.05%.

The Cost of Debt of Gold Peak Industries Holdings Ltd (40.HK) is 7.95%.

	Range	Selected
Cost of equity	22.40% - 33.70%	28.05%
Tax rate	15.00% - 20.50%	17.75%
Cost of debt	4.50% - 11.40%	7.95%
WACC	6.0% - 11.8%	8.9%

WACC

40.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	3.26	4.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	22.40%	33.70%

Tax rate	15.00%	20.50%
Debt/Equity ratio	7.86	7.86
Cost of debt	4.50%	11.40%

After-tax WACC	6.0%	11.8%


Selected WACC	8.9%

40.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 40.HK:

cost_of_equity (28.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (3.26) + 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.