The WACC of Somerley Capital Holdings Ltd (8439.HK) is 6.1%.
Range | Selected | |
Cost of equity | 5.3% - 6.9% | 6.1% |
Tax rate | 2.1% - 3.3% | 2.7% |
Cost of debt | 4.2% - 7.0% | 5.6% |
WACC | 5.2% - 6.9% | 6.1% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.41 | 0.44 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.3% | 6.9% |
Tax rate | 2.1% | 3.3% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 4.2% | 7.0% |
After-tax WACC | 5.2% | 6.9% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
8439.HK | Somerley Capital Holdings Ltd | 0.06 | 0.24 | 0.22 |
1160.HK | Youth Champ Financial Group Holdings Ltd | 0.08 | 0.09 | 0.09 |
1217.HK | China Innovation Investment Ltd | 0.01 | 1.25 | 1.24 |
204.HK | China Investment Development Ltd | 1.09 | 0.41 | 0.2 |
339.HK | Core Economy Investment Group Ltd | 0.17 | 1.17 | 1 |
428.HK | Cocoon Holdings Ltd | 0.87 | 0.06 | 0.03 |
8088.HK | AID Life Science Holdings Ltd | 5.05 | 0.25 | 0.04 |
851.HK | Sheng Yuan Holdings Ltd | 0.03 | 0.13 | 0.13 |
901.HK | Goldstone Investment Group Ltd | 3.43 | -0.25 | -0.06 |
CIW.AX | Clime Investment Management Ltd | 0.02 | 0.13 | 0.13 |
Low | High | |
Unlevered beta | 0.11 | 0.16 |
Relevered beta | 0.12 | 0.16 |
Adjusted relevered beta | 0.41 | 0.44 |
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 (6.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.