8368.HK WACC - Weighted Average Cost of Capital

The WACC of Creative China Holdings Ltd (8368.HK) is 9.5%.

The Cost of Equity of Creative China Holdings Ltd (8368.HK) is 10.10%.

The Cost of Debt of Creative China Holdings Ltd (8368.HK) is 4.25%.

	Range	Selected
Cost of equity	7.60% - 12.60%	10.10%
Tax rate	3.70% - 5.70%	4.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.2% - 11.9%	9.5%

WACC

8368.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.79	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	12.60%

Tax rate	3.70%	5.70%
Debt/Equity ratio	0.1	0.1
Cost of debt	4.00%	4.50%

After-tax WACC	7.2%	11.9%


Selected WACC	9.5%

8368.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 8368.HK:

cost_of_equity (10.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.79) + 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.