8151.HK WACC - Weighted Average Cost of Capital

The WACC of Bao Shen Holdings Ltd (8151.HK) is 11.7%.

The Cost of Equity of Bao Shen Holdings Ltd (8151.HK) is 20.25%.

The Cost of Debt of Bao Shen Holdings Ltd (8151.HK) is 8.15%.

	Range	Selected
Cost of equity	17.70% - 22.80%	20.25%
Tax rate	11.10% - 16.30%	13.70%
Cost of debt	7.00% - 9.30%	8.15%
WACC	10.3% - 13.2%	11.7%

WACC

8151.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.48	2.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.70%	22.80%

Tax rate	11.10%	16.30%
Debt/Equity ratio	1.8	1.8
Cost of debt	7.00%	9.30%

After-tax WACC	10.3%	13.2%


Selected WACC	11.7%

8151.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 8151.HK:

cost_of_equity (20.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.48) + 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.