8023.HK WACC - Weighted Average Cost of Capital

The WACC of Kwong Man Kee Group Ltd (8023.HK) is 5.8%.

The Cost of Equity of Kwong Man Kee Group Ltd (8023.HK) is 5.95%.

The Cost of Debt of Kwong Man Kee Group Ltd (8023.HK) is 4.25%.

	Range	Selected
Cost of equity	5.10% - 6.80%	5.95%
Tax rate	18.40% - 19.20%	18.80%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.0% - 6.6%	5.8%

WACC

8023.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	6.80%

Tax rate	18.40%	19.20%
Debt/Equity ratio	0.08	0.08
Cost of debt	4.00%	4.50%

After-tax WACC	5.0%	6.6%


Selected WACC	5.8%

8023.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 8023.HK:

cost_of_equity (5.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.