6993.HK WACC - Weighted Average Cost of Capital

The WACC of Blue Moon Group Holdings Ltd (6993.HK) is 8.7%.

The Cost of Equity of Blue Moon Group Holdings Ltd (6993.HK) is 8.70%.

The Cost of Debt of Blue Moon Group Holdings Ltd (6993.HK) is 9.25%.

	Range	Selected
Cost of equity	6.50% - 10.90%	8.70%
Tax rate	19.20% - 22.20%	20.70%
Cost of debt	7.00% - 11.50%	9.25%
WACC	6.5% - 10.8%	8.7%

WACC

6993.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.61	1

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	10.90%

Tax rate	19.20%	22.20%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.00%	11.50%

After-tax WACC	6.5%	10.8%


Selected WACC	8.7%

6993.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 6993.HK:

cost_of_equity (8.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.61) + 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.