821.HK WACC - Weighted Average Cost of Capital
The WACC of Value Convergence Holdings Ltd (821.HK) is 6.1%.
| Range | Selected | |
| Cost of equity | 5.6% - 7.6% | 6.6% |
| Tax rate | 1.2% - 3.0% | 2.1% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.9% - 7.3% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.45 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 7.6% |
| Tax rate | 1.2% | 3.0% |
| Debt/Equity ratio | 0.62 | 0.62 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.9% | 7.3% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 821.HK | Value Convergence Holdings Ltd | 0.62 | 1.09 | 0.68 |
| 188.HK | Sunwah Kingsway Capital Holdings Ltd | 0.43 | 0.43 | 0.3 |
| 2263.HK | Fu Shek Financial Holdings Ltd | 0.01 | 0.43 | 0.43 |
| 290.HK | China Fortune Financial Group Ltd | 0 | -0.14 | -0.14 |
| 397.HK | Power Financial Group Ltd | 0.15 | 0.38 | 0.33 |
| 430.HK | Oriental Explorer Holdings Ltd | 0.96 | 0.13 | 0.06 |
| 8001.HK | Orient Securities International Holdings Ltd | 0.01 | -1.73 | -1.71 |
| 8098.HK | CL Group (Holdings) Ltd | 0.29 | 0.16 | 0.12 |
| 812.HK | Southwest Securities International Securities Ltd | 1.26 | 0.27 | 0.12 |
| 8540.HK | Victory Securities (Holdings) Company Ltd | 0.26 | 0.12 | 0.09 |
| Low | High | |
| Unlevered beta | 0.11 | 0.19 |
| Relevered beta | 0.18 | 0.31 |
| Adjusted relevered beta | 0.45 | 0.54 |
821.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 821.HK:
cost_of_equity (6.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.