8271.HK WACC - Weighted Average Cost of Capital

The WACC of Global Digital Creations Holdings Ltd (8271.HK) is 33.8%.

The Cost of Equity of Global Digital Creations Holdings Ltd (8271.HK) is 5.95%.

The Cost of Debt of Global Digital Creations Holdings Ltd (8271.HK) is 373.35%.

	Range	Selected
Cost of equity	5.00% - 6.90%	5.95%
Tax rate	18.10% - 25.10%	21.60%
Cost of debt	7.00% - 739.70%	373.35%
WACC	5.1% - 62.5%	33.8%

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	0.36	0.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.00%	6.90%

Tax rate	18.10%	25.10%
Debt/Equity ratio	0.11	0.11
Cost of debt	7.00%	739.70%

After-tax WACC	5.1%	62.5%


Selected WACC	33.8%

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 (5.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.