40.HK WACC - Weighted Average Cost of Capital

The WACC of Gold Peak Industries Holdings Ltd (40.HK) is 7.8%.

The Cost of Equity of Gold Peak Industries Holdings Ltd (40.HK) is 21.05%.

The Cost of Debt of Gold Peak Industries Holdings Ltd (40.HK) is 6.50%.

	Range	Selected
Cost of equity	16.80% - 25.30%	21.05%
Tax rate	18.40% - 22.20%	20.30%
Cost of debt	4.90% - 8.10%	6.50%
WACC	6.2% - 9.5%	7.8%

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	2.32	3.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.80%	25.30%

Tax rate	18.40%	22.20%
Debt/Equity ratio	4.91	4.91
Cost of debt	4.90%	8.10%

After-tax WACC	6.2%	9.5%


Selected WACC	7.8%

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 (21.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.32) + 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.