6110.HK WACC - Weighted Average Cost of Capital
The WACC of Topsports International Holdings Ltd (6110.HK) is 6.4%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.1% | 7.15% |
| Tax rate | 20.5% - 23.1% | 21.8% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.6% - 7.3% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.56 | 0.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.1% |
| Tax rate | 20.5% | 23.1% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.6% | 7.3% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6110.HK | Topsports International Holdings Ltd | 0.23 | 1.77 | 1.5 |
| 1268.HK | China MeiDong Auto Holdings Ltd | 1.56 | 1.69 | 0.76 |
| 1293.HK | Grand Baoxin Auto Group Ltd | 31.6 | 2.02 | 0.08 |
| 1728.HK | China ZhengTong Auto Services Holdings Ltd | 16.27 | 1.8 | 0.13 |
| 2670.T | ABC-Mart Inc | 0 | 0.31 | 0.31 |
| 3709.HK | EEKA Fashion Holdings Ltd | 0.27 | 0.3 | 0.25 |
| 3813.HK | Pou Sheng International (Holdings) Ltd | 0.58 | 0.6 | 0.41 |
| 600398.SS | Hla Corp Ltd | 0.08 | 1.45 | 1.36 |
| 601258.SS | Pang Da Automobile Trade Co Ltd | 1.79 | 0.77 | 0.32 |
| 6188.HK | Beijing Digital Telecom Co Ltd | 33.61 | 0.69 | 0.03 |
| Low | High | |
| Unlevered beta | 0.29 | 0.36 |
| Relevered beta | 0.34 | 0.42 |
| Adjusted relevered beta | 0.56 | 0.61 |
6110.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 6110.HK:
cost_of_equity (7.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.56) + 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.