573.HK WACC - Weighted Average Cost of Capital
The WACC of Tao Heung Holdings Ltd (573.HK) is 5.0%.
| Range | Selected | |
| Cost of equity | 5.2% - 7.5% | 6.35% |
| Tax rate | 19.3% - 25.6% | 22.45% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 3.9% - 6.0% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.39 | 0.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.2% | 7.5% |
| Tax rate | 19.3% | 25.6% |
| Debt/Equity ratio | 1.82 | 1.82 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 3.9% | 6.0% |
| Selected WACC | 5.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 573.HK | Tao Heung Holdings Ltd | 1.82 | 0.39 | 0.17 |
| 1181.HK | Tang Palace (China) Holdings Ltd | 1.2 | 0.65 | 0.34 |
| 1443.HK | Fulum Group Holdings Ltd | 9.13 | -0.19 | -0.02 |
| 1483.HK | U Banquet Group Holding Ltd | 0.16 | 0.05 | 0.04 |
| 1703.HK | Palace Banquet Holdings Ltd | 1.34 | -0.96 | -0.47 |
| 1869.HK | Li Bao Ge Group Ltd | 0.32 | 0.04 | 0.03 |
| 47.HK | Hop Hing Group Holdings Ltd | 1.1 | 0.22 | 0.12 |
| 52.HK | Fairwood Holdings Ltd | 1.59 | 0.29 | 0.13 |
| 6811.HK | Tai Hing Group Holdings Ltd | 1.08 | 0.22 | 0.12 |
| 8232.HK | Classified Group (Holdings) Ltd | 0.04 | -0.61 | -0.59 |
| Low | High | |
| Unlevered beta | 0.04 | 0.12 |
| Relevered beta | 0.09 | 0.28 |
| Adjusted relevered beta | 0.39 | 0.52 |
573.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 573.HK:
cost_of_equity (6.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.39) + 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.