The WACC of Playmates Holdings Ltd (635.HK) is 7.8%.
Range | Selected | |
Cost of equity | 6.1% - 10.9% | 8.5% |
Tax rate | 20.7% - 25.3% | 23% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.7% - 9.8% | 7.8% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.54 | 1.01 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.1% | 10.9% |
Tax rate | 20.7% | 25.3% |
Debt/Equity ratio | 0.17 | 0.17 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.7% | 9.8% |
Selected WACC | 7.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
635.HK | Playmates Holdings Ltd | 0.17 | 0.24 | 0.21 |
056080.KQ | Yujin Robot Co Ltd | 0.01 | 1.32 | 1.31 |
1348.HK | Quali-Smart Holdings Ltd | 0.37 | 0.41 | 0.32 |
180.HK | Kader Holdings Co Ltd | 2.98 | 0.34 | 0.1 |
209.HK | Winshine Science Co Ltd | 8.06 | 0.12 | 0.02 |
300247.SZ | Youngy Health Co Ltd | 0 | 1.59 | 1.58 |
300329.SZ | Hailun Piano Co Ltd | 0.17 | 1.82 | 1.61 |
600818.SS | Zhonglu Co Ltd | 0.01 | 1.34 | 1.33 |
765.HK | Perfectech International Holdings Ltd | 0.16 | 0.7 | 0.62 |
869.HK | Playmates Toys Ltd | 0.02 | 0.23 | 0.22 |
Low | High | |
Unlevered beta | 0.28 | 0.9 |
Relevered beta | 0.31 | 1.01 |
Adjusted relevered beta | 0.54 | 1.01 |
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 635.HK:
cost_of_equity (8.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.