8416.HK WACC - Weighted Average Cost of Capital

The WACC of HM International Holdings Ltd (8416.HK) is 8.1%.

The Cost of Equity of HM International Holdings Ltd (8416.HK) is 8.30%.

The Cost of Debt of HM International Holdings Ltd (8416.HK) is 7.65%.

	Range	Selected
Cost of equity	6.10% - 10.50%	8.30%
Tax rate	2.20% - 2.80%	2.50%
Cost of debt	7.00% - 8.30%	7.65%
WACC	6.3% - 9.8%	8.1%

WACC

8416.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.54	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	10.50%

Tax rate	2.20%	2.80%
Debt/Equity ratio	0.43	0.43
Cost of debt	7.00%	8.30%

After-tax WACC	6.3%	9.8%


Selected WACC	8.1%

8416.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 8416.HK:

cost_of_equity (8.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.54) + 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.