623.HK WACC - Weighted Average Cost of Capital

The WACC of Sinomedia Holding Ltd (623.HK) is 8.8%.

The Cost of Equity of Sinomedia Holding Ltd (623.HK) is 8.80%.

The Cost of Debt of Sinomedia Holding Ltd (623.HK) is 4.25%.

	Range	Selected
Cost of equity	6.40% - 11.20%	8.80%
Tax rate	31.20% - 33.30%	32.25%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.4% - 11.2%	8.8%

WACC

623.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.59	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	11.20%

Tax rate	31.20%	33.30%
Debt/Equity ratio	0	0
Cost of debt	4.00%	4.50%

After-tax WACC	6.4%	11.2%


Selected WACC	8.8%

623.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 623.HK:

cost_of_equity (8.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.59) + 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.