8078.HK WACC - Weighted Average Cost of Capital
The WACC of China Creative Digital Entertainment Ltd (8078.HK) is 5.9%.
| Range | Selected | |
| Cost of equity | 7.0% - 19.1% | 13.05% |
| Tax rate | 0.1% - 1.9% | 1% |
| Cost of debt | 4.7% - 7.0% | 5.85% |
| WACC | 4.8% - 7.0% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.7 | 2.19 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 19.1% |
| Tax rate | 0.1% | 1.9% |
| Debt/Equity ratio | 105.33 | 105.33 |
| Cost of debt | 4.7% | 7.0% |
| After-tax WACC | 4.8% | 7.0% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8078.HK | China Creative Digital Entertainment Ltd | 105.33 | 0.45 | 0 |
| 002420.KS | Century Co Ltd | 0.43 | 0.12 | 0.09 |
| 326.HK | China Star Entertainment Ltd | 0.39 | -0.24 | -0.17 |
| 391.HK | Mei Ah Entertainment Group Ltd | 0.36 | -0.15 | -0.11 |
| 491.HK | Emperor Culture Group Ltd | 11.59 | 1.19 | 0.09 |
| 571.HK | Esun Holdings Ltd | 12.01 | 0.51 | 0.04 |
| 680.HK | Nan Hai Corporation Ltd | 9.09 | 0.17 | 0.02 |
| 8220.HK | Bingo Group Holdings Ltd | 0.05 | -0.08 | -0.08 |
| 8228.HK | National Arts Entertainment and Culture Group Ltd | 53.72 | 0.31 | 0.01 |
| 8271.HK | Global Digital Creations Holdings Ltd | 0.12 | 0.44 | 0.39 |
| Low | High | |
| Unlevered beta | 0.01 | 0.03 |
| Relevered beta | 0.55 | 2.78 |
| Adjusted relevered beta | 0.7 | 2.19 |
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.