733.HK WACC - Weighted Average Cost of Capital

The WACC of Hopefluent Group Holdings Ltd (733.HK) is 9.2%.

The Cost of Equity of Hopefluent Group Holdings Ltd (733.HK) is 11.10%.

The Cost of Debt of Hopefluent Group Holdings Ltd (733.HK) is 7.05%.

	Range	Selected
Cost of equity	7.20% - 15.00%	11.10%
Tax rate	9.20% - 12.40%	10.80%
Cost of debt	7.00% - 7.10%	7.05%
WACC	6.9% - 11.5%	9.2%

WACC

733.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	1.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	15.00%

Tax rate	9.20%	12.40%
Debt/Equity ratio	0.66	0.66
Cost of debt	7.00%	7.10%

After-tax WACC	6.9%	11.5%


Selected WACC	9.2%

733.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 733.HK:

cost_of_equity (11.10%) = 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.