8112.HK
Cornerstone Financial Holdings Ltd
Price:  
0.13 
HKD
Volume:  
563,000.00
Hong Kong | Media
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8112.HK WACC - Weighted Average Cost of Capital

The WACC of Cornerstone Financial Holdings Ltd (8112.HK) is 5.9%.

The Cost of Equity of Cornerstone Financial Holdings Ltd (8112.HK) is 6.45%.
The Cost of Debt of Cornerstone Financial Holdings Ltd (8112.HK) is 4.25%.

Range Selected
Cost of equity 5.10% - 7.80% 6.45%
Tax rate 3.10% - 4.90% 4.00%
Cost of debt 4.00% - 4.50% 4.25%
WACC 4.8% - 7.0% 5.9%
WACC

8112.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.37 0.56
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.10% 7.80%
Tax rate 3.10% 4.90%
Debt/Equity ratio 0.3 0.3
Cost of debt 4.00% 4.50%
After-tax WACC 4.8% 7.0%
Selected WACC 5.9%

8112.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 8112.HK:

cost_of_equity (6.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.