8300.HK WACC - Weighted Average Cost of Capital
The WACC of Royal Catering Group Holdings Co Ltd (8300.HK) is 5.7%.
| Range | Selected | |
| Cost of equity | 4.7% - 6.8% | 5.75% |
| Tax rate | 1.1% - 4.5% | 2.8% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.6% - 6.8% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.3 | 0.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.7% | 6.8% |
| Tax rate | 1.1% | 4.5% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.6% | 6.8% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8300.HK | Royal Catering Group Holdings Co Ltd | 0.11 | 0.56 | 0.5 |
| 1703.HK | Palace Banquet Holdings Ltd | 1.34 | -0.96 | -0.41 |
| 1869.HK | Li Bao Ge Group Ltd | 0.43 | 0.04 | 0.02 |
| 657.HK | G-Vision International (Holdings) Ltd | 0.24 | 0.76 | 0.62 |
| 8096.HK | Tasty Concepts Holding Ltd | 0.14 | 0.26 | 0.23 |
| 8232.HK | Classified Group (Holdings) Ltd | 0.04 | -0.63 | -0.61 |
| 8367.HK | Simplicity Holding Ltd | 0.72 | -0.59 | -0.35 |
| 8428.HK | CBK Holdings Ltd | 0.07 | 1.57 | 1.47 |
| 8432.HK | Bar Pacific Group Holdings Ltd | 5.06 | 0.31 | 0.05 |
| 8510.HK | Top Standard Corp | 0.51 | -0.2 | -0.13 |
| Low | High | |
| Unlevered beta | -0.04 | 0.12 |
| Relevered beta | -0.04 | 0.13 |
| Adjusted relevered beta | 0.3 | 0.42 |
8300.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 8300.HK:
cost_of_equity (5.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.3) + 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.