583.HK WACC - Weighted Average Cost of Capital

The WACC of Great Wall Pan Asia Holdings Ltd (583.HK) is 7.5%.

The Cost of Equity of Great Wall Pan Asia Holdings Ltd (583.HK) is 7.10%.

The Cost of Debt of Great Wall Pan Asia Holdings Ltd (583.HK) is 7.70%.

	Range	Selected
Cost of equity	5.60% - 8.60%	7.10%
Tax rate	2.10% - 2.30%	2.20%
Cost of debt	4.00% - 11.40%	7.70%
WACC	4.0% - 10.9%	7.5%

WACC

583.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.45	0.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	8.60%

Tax rate	2.10%	2.30%
Debt/Equity ratio	14.31	14.31
Cost of debt	4.00%	11.40%

After-tax WACC	4.0%	10.9%


Selected WACC	7.5%

583.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 583.HK:

cost_of_equity (7.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.