825.HK
New World Department Store China Ltd
Price:  
0.26 
HKD
Volume:  
29,000.00
Hong Kong | Multiline Retail
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825.HK WACC - Weighted Average Cost of Capital

The WACC of New World Department Store China Ltd (825.HK) is 7.1%.

The Cost of Equity of New World Department Store China Ltd (825.HK) is 15.30%.
The Cost of Debt of New World Department Store China Ltd (825.HK) is 9.30%.

Range Selected
Cost of equity 9.20% - 21.40% 15.30%
Tax rate 19.30% - 37.40% 28.35%
Cost of debt 4.00% - 14.60% 9.30%
WACC 3.8% - 10.4% 7.1%
WACC

825.HK WACC calculation

Category Low High
Long-term bond rate 2.9% 3.4%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.07 2.51
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 21.40%
Tax rate 19.30% 37.40%
Debt/Equity ratio 9.27 9.27
Cost of debt 4.00% 14.60%
After-tax WACC 3.8% 10.4%
Selected WACC 7.1%

825.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 825.HK:

cost_of_equity (15.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.07) + 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.