8052.HK WACC - Weighted Average Cost of Capital

The WACC of Luk Hing Entertainment Group Holdings Ltd (8052.HK) is 109.5%.

The Cost of Equity of Luk Hing Entertainment Group Holdings Ltd (8052.HK) is 6.30%.

The Cost of Debt of Luk Hing Entertainment Group Holdings Ltd (8052.HK) is 171.05%.

	Range	Selected
Cost of equity	5.20% - 7.40%	6.30%
Tax rate	-% - 0.30%	0.15%
Cost of debt	7.00% - 335.10%	171.05%
WACC	6.3% - 212.7%	109.5%

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	0.31	0.43

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.20%	7.40%

Tax rate	-%	0.30%
Debt/Equity ratio	1.69	1.69
Cost of debt	7.00%	335.10%

After-tax WACC	6.3%	212.7%


Selected WACC	109.5%

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 (6.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.31) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.