585.HK WACC - Weighted Average Cost of Capital

The WACC of Imagi International Holdings Ltd (585.HK) is 6.1%.

The Cost of Equity of Imagi International Holdings Ltd (585.HK) is 6.05%.

The Cost of Debt of Imagi International Holdings Ltd (585.HK) is 6.30%.

	Range	Selected
Cost of equity	5.00% - 7.10%	6.05%
Tax rate	12.50% - 17.50%	15.00%
Cost of debt	4.10% - 8.50%	6.30%
WACC	5.0% - 7.1%	6.1%

WACC

585.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.36	0.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.00%	7.10%

Tax rate	12.50%	17.50%
Debt/Equity ratio	0	0
Cost of debt	4.10%	8.50%

After-tax WACC	5.0%	7.1%


Selected WACC	6.1%

585.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 585.HK:

cost_of_equity (6.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.