608.HK WACC - Weighted Average Cost of Capital

The WACC of High Fashion International Ltd (608.HK) is 4.9%.

The Cost of Equity of High Fashion International Ltd (608.HK) is 12.30%.

The Cost of Debt of High Fashion International Ltd (608.HK) is 4.25%.

	Range	Selected
Cost of equity	10.20% - 14.40%	12.30%
Tax rate	20.60% - 21.40%	21.00%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.4% - 5.4%	4.9%

WACC

608.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.23	1.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	14.40%

Tax rate	20.60%	21.40%
Debt/Equity ratio	4.78	4.78
Cost of debt	4.00%	4.50%

After-tax WACC	4.4%	5.4%


Selected WACC	4.9%

608.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 608.HK:

cost_of_equity (12.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.23) + 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.