8523.HK WACC - Weighted Average Cost of Capital

The WACC of Sheung Moon Holdings Ltd (8523.HK) is 5.1%.

The Cost of Equity of Sheung Moon Holdings Ltd (8523.HK) is 5.05%.

The Cost of Debt of Sheung Moon Holdings Ltd (8523.HK) is 5.60%.

	Range	Selected
Cost of equity	4.20% - 5.90%	5.05%
Tax rate	3.40% - 9.00%	6.20%
Cost of debt	4.20% - 7.00%	5.60%
WACC	4.1% - 6.1%	5.1%

WACC

8523.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.22	0.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.20%	5.90%

Tax rate	3.40%	9.00%
Debt/Equity ratio	0.74	0.74
Cost of debt	4.20%	7.00%

After-tax WACC	4.1%	6.1%


Selected WACC	5.1%

8523.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 8523.HK:

cost_of_equity (5.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.22) + 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.