8059.HK WACC - Weighted Average Cost of Capital
The WACC of Glory Flame Holdings Ltd (8059.HK) is 6.4%.
| Range | Selected | |
| Cost of equity | 8.2% - 15.9% | 12.05% |
| Tax rate | 1.0% - 1.2% | 1.1% |
| Cost of debt | 4.2% - 7.0% | 5.6% |
| WACC | 4.7% - 8.2% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.9 | 1.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.2% | 15.9% |
| Tax rate | 1.0% | 1.2% |
| Debt/Equity ratio | 6.23 | 6.23 |
| Cost of debt | 4.2% | 7.0% |
| After-tax WACC | 4.7% | 8.2% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8059.HK | Glory Flame Holdings Ltd | 6.23 | 1.06 | 0.15 |
| 1894.HK | Hang Yick Holdings Co Ltd | 0.02 | 1.27 | 1.25 |
| 8188.HK | GME Group Holdings Ltd | 0.16 | 0.17 | 0.14 |
| 8275.HK | Beaver Group (Holding) Co Ltd | 0.03 | 0.08 | 0.08 |
| 8366.HK | Zhejiang United Investment Holdings Group Ltd | 0.4 | 0.71 | 0.51 |
| 8431.HK | Hao Bai International (Cayman) Ltd | 0.65 | -0.2 | -0.12 |
| 8460.HK | Basetrophy Group Holdings Ltd | 0.91 | -0.41 | -0.22 |
| 8516.HK | Grand Talents Group Holdings Ltd | 0.54 | -0.23 | -0.15 |
| 9929.HK | Sem Holdings Ltd | 0.07 | 0.67 | 0.62 |
| 9938.HK | Wah Wo Holdings Group Ltd | 0.11 | 0.68 | 0.61 |
| Low | High | |
| Unlevered beta | 0.12 | 0.29 |
| Relevered beta | 0.85 | 2.09 |
| Adjusted relevered beta | 0.9 | 1.73 |
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 (12.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.9) + 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.