480.HK WACC - Weighted Average Cost of Capital

The WACC of HKR International Ltd (480.HK) is 4.2%.

The Cost of Equity of HKR International Ltd (480.HK) is 7.95%.

The Cost of Debt of HKR International Ltd (480.HK) is 5.50%.

	Range	Selected
Cost of equity	6.70% - 9.20%	7.95%
Tax rate	30.40% - 32.10%	31.25%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.1% - 5.2%	4.2%

WACC

480.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.64	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.20%

Tax rate	30.40%	32.10%
Debt/Equity ratio	9.78	9.78
Cost of debt	4.00%	7.00%

After-tax WACC	3.1%	5.2%


Selected WACC	4.2%

480.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 480.HK:

cost_of_equity (7.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.