8472.HK WACC - Weighted Average Cost of Capital

The WACC of Lapco Holdings Ltd (8472.HK) is 8.0%.

The Cost of Equity of Lapco Holdings Ltd (8472.HK) is 10.35%.

The Cost of Debt of Lapco Holdings Ltd (8472.HK) is 4.85%.

	Range	Selected
Cost of equity	9.00% - 11.70%	10.35%
Tax rate	14.10% - 19.50%	16.80%
Cost of debt	4.60% - 5.10%	4.85%
WACC	7.1% - 8.9%	8.0%

WACC

8472.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.02	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	11.70%

Tax rate	14.10%	19.50%
Debt/Equity ratio	0.6	0.6
Cost of debt	4.60%	5.10%

After-tax WACC	7.1%	8.9%


Selected WACC	8.0%

8472.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 8472.HK:

cost_of_equity (10.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.02) + 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.