731.HK WACC - Weighted Average Cost of Capital

The WACC of Samson Paper Holdings Ltd (731.HK) is 8.0%.

The Cost of Equity of Samson Paper Holdings Ltd (731.HK) is 13.10%.

The Cost of Debt of Samson Paper Holdings Ltd (731.HK) is 5.50%.

	Range	Selected
Cost of equity	9.10% - 17.10%	13.10%
Tax rate	0.10% - 0.30%	0.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.7% - 10.3%	8.0%

WACC

731.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.04	1.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	17.10%

Tax rate	0.10%	0.30%
Debt/Equity ratio	2	2
Cost of debt	4.00%	7.00%

After-tax WACC	5.7%	10.3%


Selected WACC	8.0%

731.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 731.HK:

cost_of_equity (13.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.04) + 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.