8021.HK WACC - Weighted Average Cost of Capital

The WACC of WLS Holdings Ltd (8021.HK) is 5.4%.

The Cost of Equity of WLS Holdings Ltd (8021.HK) is 6.25%.

The Cost of Debt of WLS Holdings Ltd (8021.HK) is 4.25%.

	Range	Selected
Cost of equity	4.70% - 7.80%	6.25%
Tax rate	4.90% - 27.40%	16.15%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.5% - 6.4%	5.4%

WACC

8021.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.23	0.49

Additional risk adjustments	0.5%	1.0%
Cost of equity	4.70%	7.80%

Tax rate	4.90%	27.40%
Debt/Equity ratio	0.43	0.43
Cost of debt	4.00%	4.50%

After-tax WACC	4.5%	6.4%


Selected WACC	5.4%

8021.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 8021.HK:

cost_of_equity (6.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.23) + 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.