676.HK WACC - Weighted Average Cost of Capital
The WACC of Pegasus International Holdings Ltd (676.HK) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.5% - 7.1% | 6.3% |
| Tax rate | 22.1% - 22.3% | 22.2% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.5% - 7.1% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.35 | 0.39 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.5% | 7.1% |
| Tax rate | 22.1% | 22.3% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.5% | 7.1% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 676.HK | Pegasus International Holdings Ltd | 0.01 | 0.19 | 0.19 |
| 1170.HK | Kingmaker Footwear Holdings Ltd | 0.01 | 0.35 | 0.35 |
| 1520.HK | CEFC Hong Kong Financial Investment Company Ltd | 0.06 | -0.42 | -0.4 |
| 1836.HK | Stella International Holdings Ltd | 0.01 | 0.16 | 0.16 |
| 442.HK | Hifood Group Holdings Co Ltd | 0.01 | 0.05 | 0.05 |
| 551.HK | Yue Yuen Industrial (Holdings) Ltd | 0.73 | 0.25 | 0.16 |
| 738.HK | Le Saunda Holdings Ltd | 0.11 | 0.03 | 0.03 |
| 8187.HK | Jimu Group Ltd | 0.01 | -0.15 | -0.15 |
| 8521.HK | ST International Holdings Company Ltd | 0.1 | -0.49 | -0.46 |
| 8537.HK | Chong Fai Jewellery Group Holdings Co Ltd | 0.81 | 0.06 | 0.04 |
| Low | High | |
| Unlevered beta | 0.04 | 0.09 |
| Relevered beta | 0.03 | 0.09 |
| Adjusted relevered beta | 0.35 | 0.39 |
676.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 676.HK:
cost_of_equity (6.30%) = 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.