6928.HK WACC - Weighted Average Cost of Capital

The WACC of TOMO Holdings Ltd (6928.HK) is 8.9%.

The Cost of Equity of TOMO Holdings Ltd (6928.HK) is 8.90%.

The Cost of Debt of TOMO Holdings Ltd (6928.HK) is 12.00%.

	Range	Selected
Cost of equity	7.10% - 10.70%	8.90%
Tax rate	6.10% - 18.70%	12.40%
Cost of debt	7.00% - 17.00%	12.00%
WACC	7.1% - 10.7%	8.9%

WACC

6928.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.72	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	10.70%

Tax rate	6.10%	18.70%
Debt/Equity ratio	0	0
Cost of debt	7.00%	17.00%

After-tax WACC	7.1%	10.7%


Selected WACC	8.9%

6928.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 6928.HK:

cost_of_equity (8.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.72) + 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.