8027.HK WACC - Weighted Average Cost of Capital

The WACC of KPM Holding Ltd (8027.HK) is 8.2%.

The Cost of Equity of KPM Holding Ltd (8027.HK) is 10.60%.

The Cost of Debt of KPM Holding Ltd (8027.HK) is 5.50%.

	Range	Selected
Cost of equity	8.60% - 12.60%	10.60%
Tax rate	11.10% - 20.40%	15.75%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.6% - 9.7%	8.2%

WACC

8027.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.96	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	12.60%

Tax rate	11.10%	20.40%
Debt/Equity ratio	0.68	0.68
Cost of debt	4.00%	7.00%

After-tax WACC	6.6%	9.7%


Selected WACC	8.2%

8027.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 8027.HK:

cost_of_equity (10.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.96) + 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.