8123.HK WACC - Weighted Average Cost of Capital

The WACC of Sinofortune Financial Holdings Ltd (8123.HK) is 6.7%.

The Cost of Equity of Sinofortune Financial Holdings Ltd (8123.HK) is 6.30%.

The Cost of Debt of Sinofortune Financial Holdings Ltd (8123.HK) is 8.10%.

	Range	Selected
Cost of equity	5.30% - 7.30%	6.30%
Tax rate	0.50% - 0.60%	0.55%
Cost of debt	7.00% - 9.20%	8.10%
WACC	5.7% - 7.8%	6.7%

WACC

8123.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.32	0.42

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.30%	7.30%

Tax rate	0.50%	0.60%
Debt/Equity ratio	0.37	0.37
Cost of debt	7.00%	9.20%

After-tax WACC	5.7%	7.8%


Selected WACC	6.7%

8123.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 8123.HK:

cost_of_equity (6.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.32) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.