626.HK WACC - Weighted Average Cost of Capital
The WACC of Public Financial Holdings Ltd (626.HK) is 6.2%.
| Range | Selected | |
| Cost of equity | 7.0% - 10.4% | 8.7% |
| Tax rate | 17.5% - 18.2% | 17.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.5% - 7.0% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.69 | 0.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 10.4% |
| Tax rate | 17.5% | 18.2% |
| Debt/Equity ratio | 1.17 | 1.17 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.5% | 7.0% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 626.HK | Public Financial Holdings Ltd | 1.17 | 0.56 | 0.28 |
| 006220.KS | Jeju Bank | 0.98 | 1.24 | 0.69 |
| 8337.T | Chiba Kogyo Bank Ltd | 0.51 | 1.56 | 1.1 |
| 8343.T | Akita Bank Ltd | 1.58 | 0.97 | 0.42 |
| 8344.T | Yamagata Bank Ltd | 2.78 | 0.87 | 0.26 |
| 8395.T | Bank of Saga Ltd | 1.47 | 1.14 | 0.52 |
| 8527.T | Aichi Bank Ltd | 10.48 | 0.78 | 0.08 |
| 8530.T | Chukyo Bank Ltd | 8.7 | 0.49 | 0.06 |
| 8558.T | Towa Bank Ltd | 4.22 | 0.94 | 0.21 |
| INPC.JK | Bank Artha Graha Internasional Tbk PT | 0.24 | 1.42 | 1.18 |
| Low | High | |
| Unlevered beta | 0.28 | 0.46 |
| Relevered beta | 0.54 | 0.91 |
| Adjusted relevered beta | 0.69 | 0.94 |
626.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 626.HK:
cost_of_equity (8.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.69) + 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.