8439.HK WACC - Weighted Average Cost of Capital

The WACC of Somerley Capital Holdings Ltd (8439.HK) is 6.3%.

The Cost of Equity of Somerley Capital Holdings Ltd (8439.HK) is 6.40%.

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

	Range	Selected
Cost of equity	5.40% - 7.40%	6.40%
Tax rate	1.20% - 1.80%	1.50%
Cost of debt	4.20% - 7.00%	5.60%
WACC	5.3% - 7.3%	6.3%

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	0.34	0.43

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.40%	7.40%

Tax rate	1.20%	1.80%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.20%	7.00%

After-tax WACC	5.3%	7.3%


Selected WACC	6.3%

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 (6.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.34) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.