8086.HK WACC - Weighted Average Cost of Capital

The WACC of Sino Vision Worldwide Holdings Ltd (8086.HK) is 5.6%.

The Cost of Equity of Sino Vision Worldwide Holdings Ltd (8086.HK) is 5.70%.

The Cost of Debt of Sino Vision Worldwide Holdings Ltd (8086.HK) is 5.50%.

	Range	Selected
Cost of equity	4.80% - 6.60%	5.70%
Tax rate	0.70% - 2.60%	1.65%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.4% - 6.7%	5.6%

WACC

8086.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.33	0.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.60%

Tax rate	0.70%	2.60%
Debt/Equity ratio	0.8	0.8
Cost of debt	4.00%	7.00%

After-tax WACC	4.4%	6.7%


Selected WACC	5.6%

8086.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 8086.HK:

cost_of_equity (5.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + 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.