428.HK WACC - Weighted Average Cost of Capital
The WACC of Cocoon Holdings Ltd (428.HK) is 5.7%.
| Range | Selected | |
| Cost of equity | 5.6% - 8.0% | 6.8% |
| Tax rate | 22.1% - 22.3% | 22.2% |
| Cost of debt | 4.0% - 7.3% | 5.65% |
| WACC | 4.4% - 6.9% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.46 | 0.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 8.0% |
| Tax rate | 22.1% | 22.3% |
| Debt/Equity ratio | 0.87 | 0.87 |
| Cost of debt | 4.0% | 7.3% |
| After-tax WACC | 4.4% | 6.9% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 428.HK | Cocoon Holdings Ltd | 0.87 | 0.06 | 0.04 |
| 1140.HK | Wealthking Investments Ltd | 1.79 | 0.35 | 0.15 |
| 1160.HK | Youth Champ Financial Group Holdings Ltd | 0.08 | 0.09 | 0.09 |
| 1217.HK | China Innovation Investment Ltd | 0.01 | 1.25 | 1.24 |
| 1226.HK | China Investment and Finance Group Ltd | 0.02 | 1.1 | 1.09 |
| 8088.HK | AID Life Science Holdings Ltd | 5.05 | 0.25 | 0.05 |
| 8340.HK | Vinco Financial Group Ltd | 1.6 | 0.84 | 0.37 |
| 851.HK | Sheng Yuan Holdings Ltd | 0.03 | 0.13 | 0.13 |
| 901.HK | Goldstone Investment Group Ltd | 3.43 | -0.25 | -0.07 |
| 905.HK | Global Mastermind Capital Ltd | 0.01 | 1.27 | 1.25 |
| Low | High | |
| Unlevered beta | 0.11 | 0.24 |
| Relevered beta | 0.19 | 0.4 |
| Adjusted relevered beta | 0.46 | 0.6 |
428.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 428.HK:
cost_of_equity (6.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.