6882.HK WACC - Weighted Average Cost of Capital

The WACC of EGL Holdings Co Ltd (6882.HK) is 6.5%.

The Cost of Equity of EGL Holdings Co Ltd (6882.HK) is 11.25%.

The Cost of Debt of EGL Holdings Co Ltd (6882.HK) is 4.25%.

	Range	Selected
Cost of equity	8.60% - 13.90%	11.25%
Tax rate	21.50% - 22.00%	21.75%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.3% - 7.7%	6.5%

WACC

6882.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.96	1.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	13.90%

Tax rate	21.50%	22.00%
Debt/Equity ratio	1.5	1.5
Cost of debt	4.00%	4.50%

After-tax WACC	5.3%	7.7%


Selected WACC	6.5%

6882.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 6882.HK:

cost_of_equity (11.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.96) + 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.