653.HK WACC - Weighted Average Cost of Capital

The WACC of Bonjour Holdings Ltd (653.HK) is 8.7%.

The Cost of Equity of Bonjour Holdings Ltd (653.HK) is 6.60%.

The Cost of Debt of Bonjour Holdings Ltd (653.HK) is 10.70%.

	Range	Selected
Cost of equity	5.50% - 7.70%	6.60%
Tax rate	0.70% - 1.40%	1.05%
Cost of debt	7.00% - 14.40%	10.70%
WACC	6.3% - 11.2%	8.7%

WACC

653.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.35	0.48

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.50%	7.70%

Tax rate	0.70%	1.40%
Debt/Equity ratio	1.15	1.15
Cost of debt	7.00%	14.40%

After-tax WACC	6.3%	11.2%


Selected WACC	8.7%

653.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 653.HK:

cost_of_equity (6.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.