8419.HK WACC - Weighted Average Cost of Capital
The WACC of AV Promotions Holdings Ltd (8419.HK) is 7.6%.
| Range | Selected | |
| Cost of equity | 5.0% - 6.9% | 5.95% |
| Tax rate | 15.2% - 23.7% | 19.45% |
| Cost of debt | 6.4% - 14.6% | 10.5% |
| WACC | 5.3% - 9.9% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.36 | 0.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.0% | 6.9% |
| Tax rate | 15.2% | 23.7% |
| Debt/Equity ratio | 2.23 | 2.23 |
| Cost of debt | 6.4% | 14.6% |
| After-tax WACC | 5.3% | 9.9% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8419.HK | AV Promotions Holdings Ltd | 2.23 | 0.97 | 0.35 |
| 1867.HK | LKS Holding Group Ltd | 0.07 | -0.22 | -0.21 |
| 3997.HK | Telecom Service One Holdings Ltd | 0.09 | -0.31 | -0.29 |
| 544.HK | Daido Group Ltd | 26.18 | 0.63 | 0.03 |
| 674.HK | China Tangshang Holdings Ltd | 1.32 | -0.01 | 0 |
| 8128.HK | China Geothermal Industry Development Group Ltd | 0.36 | 0.42 | 0.32 |
| 8140.HK | Bosa Technology Holdings Ltd | 0.05 | -0.04 | -0.04 |
| 8201.HK | PPS International (Holdings) Ltd | 0.55 | 0.66 | 0.46 |
| 969.HK | Hua Lien International Holding Co Ltd | 4.05 | 0.2 | 0.05 |
| ECG.AX | eCargo Holdings Ltd | 7.61 | 0.52 | 0.07 |
| Low | High | |
| Unlevered beta | 0.02 | 0.06 |
| Relevered beta | 0.04 | 0.16 |
| Adjusted relevered beta | 0.36 | 0.44 |
8419.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 8419.HK:
cost_of_equity (5.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.