403.HK WACC - Weighted Average Cost of Capital

The WACC of Starlite Holdings Ltd (403.HK) is 4.1%.

The Cost of Equity of Starlite Holdings Ltd (403.HK) is 5.75%.

The Cost of Debt of Starlite Holdings Ltd (403.HK) is 4.25%.

	Range	Selected
Cost of equity	4.80% - 6.70%	5.75%
Tax rate	21.60% - 37.40%	29.50%
Cost of debt	4.00% - 4.50%	4.25%
WACC	3.8% - 4.4%	4.1%

WACC

403.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.25	0.34

Additional risk adjustments	0.5%	1.0%
Cost of equity	4.80%	6.70%

Tax rate	21.60%	37.40%
Debt/Equity ratio	1.51	1.51
Cost of debt	4.00%	4.50%

After-tax WACC	3.8%	4.4%


Selected WACC	4.1%

403.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 403.HK:

cost_of_equity (5.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.25) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.