8059.HK WACC - Weighted Average Cost of Capital

The WACC of Glory Flame Holdings Ltd (8059.HK) is 5.5%.

The Cost of Equity of Glory Flame Holdings Ltd (8059.HK) is 6.35%.

The Cost of Debt of Glory Flame Holdings Ltd (8059.HK) is 5.50%.

	Range	Selected
Cost of equity	3.80% - 8.90%	6.35%
Tax rate	1.20% - 3.10%	2.15%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.9% - 7.1%	5.5%

WACC

8059.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	-0.27	0.36

Additional risk adjustments	2.5%	3.0%
Cost of equity	3.80%	8.90%

Tax rate	1.20%	3.10%
Debt/Equity ratio	5.72	5.72
Cost of debt	4.00%	7.00%

After-tax WACC	3.9%	7.1%


Selected WACC	5.5%

8059.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 8059.HK:

cost_of_equity (6.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (-0.27) + risk_adjustments (2.75%)

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