8191.HK WACC - Weighted Average Cost of Capital

The WACC of Hong Wei Asia Holdings Co Ltd (8191.HK) is 7.7%.

The Cost of Equity of Hong Wei Asia Holdings Co Ltd (8191.HK) is 93.00%.

The Cost of Debt of Hong Wei Asia Holdings Co Ltd (8191.HK) is 6.60%.

	Range	Selected
Cost of equity	34.10% - 151.90%	93.00%
Tax rate	13.60% - 19.70%	16.65%
Cost of debt	6.20% - 7.00%	6.60%
WACC	6.1% - 9.3%	7.7%

WACC

8191.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	5.22	21.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	34.10%	151.90%

Tax rate	13.60%	19.70%
Debt/Equity ratio	38.54	38.54
Cost of debt	6.20%	7.00%

After-tax WACC	6.1%	9.3%


Selected WACC	7.7%

8191.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 8191.HK:

cost_of_equity (93.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (5.22) + 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.