6038.HK WACC - Weighted Average Cost of Capital

The WACC of G & M Holdings Ltd (6038.HK) is 8.1%.

The Cost of Equity of G & M Holdings Ltd (6038.HK) is 8.20%.

The Cost of Debt of G & M Holdings Ltd (6038.HK) is 4.40%.

	Range	Selected
Cost of equity	7.10% - 9.30%	8.20%
Tax rate	16.10% - 16.40%	16.25%
Cost of debt	4.00% - 4.80%	4.40%
WACC	7.0% - 9.3%	8.1%

WACC

6038.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.71	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	9.30%

Tax rate	16.10%	16.40%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	4.80%

After-tax WACC	7.0%	9.3%


Selected WACC	8.1%

6038.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 6038.HK:

cost_of_equity (8.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.71) + 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.