8305.HK WACC - Weighted Average Cost of Capital

The WACC of Tong Kee (Holding) Ltd (8305.HK) is 5.9%.

The Cost of Equity of Tong Kee (Holding) Ltd (8305.HK) is 5.85%.

The Cost of Debt of Tong Kee (Holding) Ltd (8305.HK) is 7.95%.

	Range	Selected
Cost of equity	4.90% - 6.80%	5.85%
Tax rate	1.50% - 2.10%	1.80%
Cost of debt	7.00% - 8.90%	7.95%
WACC	4.9% - 6.8%	5.9%

WACC

8305.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.34	0.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.90%	6.80%

Tax rate	1.50%	2.10%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.00%	8.90%

After-tax WACC	4.9%	6.8%


Selected WACC	5.9%

8305.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 8305.HK:

cost_of_equity (5.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.34) + 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.