8271.HK WACC - Weighted Average Cost of Capital

The WACC of Global Digital Creations Holdings Ltd (8271.HK) is 15.1%.

The Cost of Equity of Global Digital Creations Holdings Ltd (8271.HK) is 6.90%.

The Cost of Debt of Global Digital Creations Holdings Ltd (8271.HK) is 371.70%.

	Range	Selected
Cost of equity	5.50% - 8.30%	6.90%
Tax rate	21.50% - 28.90%	25.20%
Cost of debt	4.00% - 739.40%	371.70%
WACC	5.4% - 24.9%	15.1%

WACC

8271.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.44	0.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	8.30%

Tax rate	21.50%	28.90%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	739.40%

After-tax WACC	5.4%	24.9%


Selected WACC	15.1%

8271.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 8271.HK:

cost_of_equity (6.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.