The WACC of BCI Group Holdings Ltd (8412.HK) is 5.7%.
Range | Selected | |
Cost of equity | 4.7% - 7.1% | 5.9% |
Tax rate | 3.6% - 6.4% | 5% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 4.5% - 7.0% | 5.7% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.31 | 0.47 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 4.7% | 7.1% |
Tax rate | 3.6% | 6.4% |
Debt/Equity ratio | 0.37 | 0.37 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 4.5% | 7.0% |
Selected WACC | 5.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
8412.HK | BCI Group Holdings Ltd | 0.37 | 1.28 | 0.95 |
1632.HK | Minshang Creative Technology Holdings Ltd | 0.01 | -0.58 | -0.58 |
1703.HK | Palace Banquet Holdings Ltd | 0.22 | -0.96 | -0.79 |
657.HK | G-Vision International (Holdings) Ltd | 1.25 | 0.89 | 0.41 |
8096.HK | Tasty Concepts Holding Ltd | 0.14 | 0.31 | 0.28 |
8300.HK | Royal Catering Group Holdings Co Ltd | 0.12 | 0.45 | 0.4 |
8367.HK | Simplicity Holding Ltd | 0.87 | -0.26 | -0.15 |
8432.HK | Bar Pacific Group Holdings Ltd | 4.62 | 0.27 | 0.05 |
8493.HK | Dragon King Group Holdings Ltd | 5.88 | 0.47 | 0.07 |
8510.HK | Top Standard Corp | 0.42 | -0.19 | -0.14 |
Low | High | |
Unlevered beta | -0.02 | 0.15 |
Relevered beta | -0.03 | 0.21 |
Adjusted relevered beta | 0.31 | 0.47 |
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 8412.HK:
cost_of_equity (5.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.31) + 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.