The WACC of Kwong Man Kee Group Ltd (8023.HK) is 6.1%.
Range | Selected | |
Cost of equity | 5.3% - 7.3% | 6.3% |
Tax rate | 18.4% - 19.5% | 18.95% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.2% - 7.1% | 6.1% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.24 | 0.34 |
Additional risk adjustments | 1.0% | 1.5% |
Cost of equity | 5.3% | 7.3% |
Tax rate | 18.4% | 19.5% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.2% | 7.1% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
8023.HK | Kwong Man Kee Group Ltd | 0.05 | -0.5 | -0.48 |
1246.HK | Boill Healthcare Holdings Ltd | 29.53 | -0.23 | -0.01 |
1751.HK | Kingland Group Holdings Ltd | 0.2 | 0.29 | 0.25 |
8059.HK | Glory Flame Holdings Ltd | 5.72 | 0.87 | 0.15 |
8188.HK | GME Group Holdings Ltd | 0.14 | 0.07 | 0.06 |
8275.HK | Beaver Group (Holding) Co Ltd | 0.01 | -0.13 | -0.13 |
8431.HK | Hao Bai International (Cayman) Ltd | 0.81 | -0.23 | -0.14 |
8460.HK | Basetrophy Group Holdings Ltd | 1.04 | -0.31 | -0.17 |
8516.HK | Grand Talents Group Holdings Ltd | 0.08 | -0.24 | -0.23 |
8601.HK | Boltek Holdings Ltd | 0.04 | 0.39 | 0.38 |
Low | High | |
Unlevered beta | -0.13 | 0.02 |
Relevered beta | -0.13 | 0.01 |
Adjusted relevered beta | 0.24 | 0.34 |
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 (6.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.24) + risk_adjustments (1.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.