8146.HK WACC - Weighted Average Cost of Capital

The WACC of Grace Wine Holdings Ltd (8146.HK) is 9.6%.

The Cost of Equity of Grace Wine Holdings Ltd (8146.HK) is 10.00%.

The Cost of Debt of Grace Wine Holdings Ltd (8146.HK) is 11.50%.

	Range	Selected
Cost of equity	7.80% - 12.20%	10.00%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	7.00% - 16.00%	11.50%
WACC	7.0% - 12.3%	9.6%

WACC

8146.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.83	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	12.20%

Tax rate	22.10%	22.30%
Debt/Equity ratio	0.58	0.58
Cost of debt	7.00%	16.00%

After-tax WACC	7.0%	12.3%


Selected WACC	9.6%

8146.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 8146.HK:

cost_of_equity (10.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.