8052.HK WACC - Weighted Average Cost of Capital

The WACC of Luk Hing Entertainment Group Holdings Ltd (8052.HK) is 134.6%.

The Cost of Equity of Luk Hing Entertainment Group Holdings Ltd (8052.HK) is 6.25%.

The Cost of Debt of Luk Hing Entertainment Group Holdings Ltd (8052.HK) is 200.75%.

	Range	Selected
Cost of equity	5.30% - 7.20%	6.25%
Tax rate	0.50% - 0.90%	0.70%
Cost of debt	7.00% - 394.50%	200.75%
WACC	6.4% - 262.9%	134.6%

WACC

8052.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.41	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	7.20%

Tax rate	0.50%	0.90%
Debt/Equity ratio	2	2
Cost of debt	7.00%	394.50%

After-tax WACC	6.4%	262.9%


Selected WACC	134.6%

8052.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 8052.HK:

cost_of_equity (6.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.