8228.HK WACC - Weighted Average Cost of Capital

The WACC of National Arts Entertainment and Culture Group Ltd (8228.HK) is 6.6%.

The Cost of Equity of National Arts Entertainment and Culture Group Ltd (8228.HK) is 74.55%.

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

	Range	Selected
Cost of equity	41.60% - 107.50%	74.55%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	6.60% - 7.00%	6.80%
WACC	5.8% - 7.3%	6.6%

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	6.48	14.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	41.60%	107.50%

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%	7.3%


Selected WACC	6.6%

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 (74.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (6.48) + 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.