8495.HK WACC - Weighted Average Cost of Capital

The WACC of 1957 & Co (Hospitality) Ltd (8495.HK) is 7.7%.

The Cost of Equity of 1957 & Co (Hospitality) Ltd (8495.HK) is 10.85%.

The Cost of Debt of 1957 & Co (Hospitality) Ltd (8495.HK) is 8.00%.

	Range	Selected
Cost of equity	7.70% - 14.00%	10.85%
Tax rate	16.30% - 19.40%	17.85%
Cost of debt	4.60% - 11.40%	8.00%
WACC	5.0% - 10.5%	7.7%

WACC

8495.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.81	1.45

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	14.00%

Tax rate	16.30%	19.40%
Debt/Equity ratio	2.57	2.57
Cost of debt	4.60%	11.40%

After-tax WACC	5.0%	10.5%


Selected WACC	7.7%

8495.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 8495.HK:

cost_of_equity (10.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.81) + 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.