595.HK WACC - Weighted Average Cost of Capital

The WACC of AV Concept Holdings Ltd (595.HK) is 9.2%.

The Cost of Equity of AV Concept Holdings Ltd (595.HK) is 8.95%.

The Cost of Debt of AV Concept Holdings Ltd (595.HK) is 12.35%.

	Range	Selected
Cost of equity	8.00% - 9.90%	8.95%
Tax rate	0.90% - 1.50%	1.20%
Cost of debt	7.00% - 17.70%	12.35%
WACC	7.9% - 10.6%	9.2%

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	0.85	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	9.90%

Tax rate	0.90%	1.50%
Debt/Equity ratio	0.09	0.09
Cost of debt	7.00%	17.70%

After-tax WACC	7.9%	10.6%


Selected WACC	9.2%

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 (8.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.85) + 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.