8078.HK
China Creative Digital Entertainment Ltd
Price:  
0.02 
HKD
Volume:  
96,025
Hong Kong | Entertainment

8078.HK WACC - Weighted Average Cost of Capital

The WACC of China Creative Digital Entertainment Ltd (8078.HK) is 5.9%.

The Cost of Equity of China Creative Digital Entertainment Ltd (8078.HK) is 13.05%.
The Cost of Debt of China Creative Digital Entertainment Ltd (8078.HK) is 5.85%.

RangeSelected
Cost of equity7.0% - 19.1%13.05%
Tax rate0.1% - 1.9%1%
Cost of debt4.7% - 7.0%5.85%
WACC4.8% - 7.0%5.9%
WACC

8078.HK WACC calculation

CategoryLowHigh
Long-term bond rate2.9%3.4%
Equity market risk premium6.0%7.0%
Adjusted beta0.72.19
Additional risk adjustments0.0%0.5%
Cost of equity7.0%19.1%
Tax rate0.1%1.9%
Debt/Equity ratio
105.33105.33
Cost of debt4.7%7.0%
After-tax WACC4.8%7.0%
Selected WACC5.9%

8078.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 8078.HK:

cost_of_equity (13.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.7) + 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.