738.HK WACC - Weighted Average Cost of Capital
The WACC of Le Saunda Holdings Ltd (738.HK) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.4% - 7.3% | 6.35% |
| Tax rate | 9.4% - 22.8% | 16.1% |
| Cost of debt | 4.3% - 7.0% | 5.65% |
| WACC | 5.4% - 7.2% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.35 | 0.41 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.4% | 7.3% |
| Tax rate | 9.4% | 22.8% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 4.3% | 7.0% |
| After-tax WACC | 5.4% | 7.2% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 738.HK | Le Saunda Holdings Ltd | 0.05 | 0.11 | 0.1 |
| 1100.HK | Mainland Headwear Holdings Ltd | 0.43 | -0.25 | -0.18 |
| 1170.HK | Kingmaker Footwear Holdings Ltd | 0.01 | 0.34 | 0.33 |
| 1825.HK | Sterling Group Holdings Ltd | 3.63 | 0.04 | 0.01 |
| 1836.HK | Stella International Holdings Ltd | 0.01 | 0.24 | 0.23 |
| 213.HK | National Electronics Holdings Ltd | 14.39 | 0.25 | 0.02 |
| 513.HK | Continental Holdings Ltd | 9.64 | 0.24 | 0.03 |
| 551.HK | Yue Yuen Industrial (Holdings) Ltd | 0.72 | 0.24 | 0.15 |
| 676.HK | Pegasus International Holdings Ltd | 0.01 | 0.3 | 0.3 |
| 8187.HK | Jimu Group Ltd | 0.02 | -0.24 | -0.24 |
| Low | High | |
| Unlevered beta | 0.02 | 0.12 |
| Relevered beta | 0.03 | 0.12 |
| Adjusted relevered beta | 0.35 | 0.41 |
738.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 738.HK:
cost_of_equity (6.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.