8439.HK WACC - Weighted Average Cost of Capital

The WACC of Somerley Capital Holdings Ltd (8439.HK) is 5.9%.

The Cost of Equity of Somerley Capital Holdings Ltd (8439.HK) is 5.90%.

The Cost of Debt of Somerley Capital Holdings Ltd (8439.HK) is 5.60%.

	Range	Selected
Cost of equity	5.10% - 6.70%	5.90%
Tax rate	2.10% - 3.30%	2.70%
Cost of debt	4.20% - 7.00%	5.60%
WACC	5.1% - 6.7%	5.9%

WACC

8439.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	6.70%

Tax rate	2.10%	3.30%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.20%	7.00%

After-tax WACC	5.1%	6.7%


Selected WACC	5.9%

8439.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 8439.HK:

cost_of_equity (5.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.