8280.HK WACC - Weighted Average Cost of Capital

The WACC of China Digital Video Holdings Ltd (8280.HK) is 8.0%.

The Cost of Equity of China Digital Video Holdings Ltd (8280.HK) is 15.80%.

The Cost of Debt of China Digital Video Holdings Ltd (8280.HK) is 6.15%.

	Range	Selected
Cost of equity	8.60% - 23.00%	15.80%
Tax rate	1.10% - 3.00%	2.05%
Cost of debt	5.30% - 7.00%	6.15%
WACC	5.9% - 10.0%	8.0%

WACC

8280.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.96	2.74

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	23.00%

Tax rate	1.10%	3.00%
Debt/Equity ratio	4.03	4.03
Cost of debt	5.30%	7.00%

After-tax WACC	5.9%	10.0%


Selected WACC	8.0%

8280.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 8280.HK:

cost_of_equity (15.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.96) + 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.