803.HK WACC - Weighted Average Cost of Capital

The WACC of Prosperity International Holdings HK Ltd (803.HK) is 13.6%.

The Cost of Equity of Prosperity International Holdings HK Ltd (803.HK) is 12.55%.

The Cost of Debt of Prosperity International Holdings HK Ltd (803.HK) is 14.70%.

	Range	Selected
Cost of equity	10.30% - 14.80%	12.55%
Tax rate	3.50% - 8.00%	5.75%
Cost of debt	6.50% - 22.90%	14.70%
WACC	6.3% - 20.9%	13.6%

WACC

803.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.24	1.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	14.80%

Tax rate	3.50%	8.00%
Debt/Equity ratio	42.36	42.36
Cost of debt	6.50%	22.90%

After-tax WACC	6.3%	20.9%


Selected WACC	13.6%

803.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 803.HK:

cost_of_equity (12.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.24) + 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.