8363.HK WACC - Weighted Average Cost of Capital

The WACC of Sdm Group Holdings Ltd (8363.HK) is 20.8%.

The Cost of Equity of Sdm Group Holdings Ltd (8363.HK) is 7.05%.

The Cost of Debt of Sdm Group Holdings Ltd (8363.HK) is 22.90%.

	Range	Selected
Cost of equity	5.30% - 8.80%	7.05%
Tax rate	0.40% - 0.70%	0.55%
Cost of debt	22.90% - 22.90%	22.90%
WACC	20.6% - 21.0%	20.8%

WACC

8363.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	-0.01	0.35

Additional risk adjustments	2.5%	3.0%
Cost of equity	5.30%	8.80%

Tax rate	0.40%	0.70%
Debt/Equity ratio	7.01	7.01
Cost of debt	22.90%	22.90%

After-tax WACC	20.6%	21.0%


Selected WACC	20.8%

8363.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 8363.HK:

cost_of_equity (7.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (-0.01) + risk_adjustments (2.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.