8475.HK WACC - Weighted Average Cost of Capital

The WACC of K Group Holdings Ltd (8475.HK) is 11.1%.

The Cost of Equity of K Group Holdings Ltd (8475.HK) is 9.70%.

The Cost of Debt of K Group Holdings Ltd (8475.HK) is 11.95%.

	Range	Selected
Cost of equity	7.60% - 11.80%	9.70%
Tax rate	0.70% - 1.60%	1.15%
Cost of debt	7.00% - 16.90%	11.95%
WACC	7.2% - 15.1%	11.1%

WACC

8475.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.79	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	11.80%

Tax rate	0.70%	1.60%
Debt/Equity ratio	2.24	2.24
Cost of debt	7.00%	16.90%

After-tax WACC	7.2%	15.1%


Selected WACC	11.1%

8475.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 8475.HK:

cost_of_equity (9.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.79) + 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.