595.HK WACC - Weighted Average Cost of Capital

The WACC of AV Concept Holdings Ltd (595.HK) is 8.2%.

The Cost of Equity of AV Concept Holdings Ltd (595.HK) is 8.30%.

The Cost of Debt of AV Concept Holdings Ltd (595.HK) is 6.90%.

	Range	Selected
Cost of equity	7.10% - 9.50%	8.30%
Tax rate	1.50% - 2.00%	1.75%
Cost of debt	6.80% - 7.00%	6.90%
WACC	7.1% - 9.3%	8.2%

WACC

595.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.7	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	9.50%

Tax rate	1.50%	2.00%
Debt/Equity ratio	0.09	0.09
Cost of debt	6.80%	7.00%

After-tax WACC	7.1%	9.3%


Selected WACC	8.2%

595.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 595.HK:

cost_of_equity (8.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.7) + 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.