472.HK WACC - Weighted Average Cost of Capital

The WACC of New Silkroad Culturaltainment Ltd (472.HK) is 5.6%.

The Cost of Equity of New Silkroad Culturaltainment Ltd (472.HK) is 5.80%.

The Cost of Debt of New Silkroad Culturaltainment Ltd (472.HK) is 6.15%.

	Range	Selected
Cost of equity	4.50% - 7.10%	5.80%
Tax rate	15.60% - 28.00%	21.80%
Cost of debt	4.20% - 8.10%	6.15%
WACC	4.4% - 6.9%	5.6%

WACC

472.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.19	0.39

Additional risk adjustments	0.5%	1.0%
Cost of equity	4.50%	7.10%

Tax rate	15.60%	28.00%
Debt/Equity ratio	0.17	0.17
Cost of debt	4.20%	8.10%

After-tax WACC	4.4%	6.9%


Selected WACC	5.6%

472.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 472.HK:

cost_of_equity (5.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.19) + 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.