8228.HK WACC - Weighted Average Cost of Capital

The WACC of National Arts Entertainment and Culture Group Ltd (8228.HK) is 6.7%.

The Cost of Equity of National Arts Entertainment and Culture Group Ltd (8228.HK) is 83.30%.

The Cost of Debt of National Arts Entertainment and Culture Group Ltd (8228.HK) is 6.80%.

	Range	Selected
Cost of equity	41.20% - 125.40%	83.30%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	6.60% - 7.00%	6.80%
WACC	5.8% - 7.6%	6.7%

WACC

8228.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	6.42	17.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	41.20%	125.40%

Tax rate	22.10%	22.30%
Debt/Equity ratio	53.72	53.72
Cost of debt	6.60%	7.00%

After-tax WACC	5.8%	7.6%


Selected WACC	6.7%

8228.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 8228.HK:

cost_of_equity (83.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (6.42) + 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.