8532.HK WACC - Weighted Average Cost of Capital

The WACC of Polyfair Holdings Ltd (8532.HK) is 4.0%.

The Cost of Equity of Polyfair Holdings Ltd (8532.HK) is 5.05%.

The Cost of Debt of Polyfair Holdings Ltd (8532.HK) is 5.75%.

	Range	Selected
Cost of equity	3.60% - 6.50%	5.05%
Tax rate	28.70% - 35.50%	32.10%
Cost of debt	5.00% - 6.50%	5.75%
WACC	3.6% - 4.4%	4.0%

WACC

8532.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.13	0.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	3.60%	6.50%

Tax rate	28.70%	35.50%
Debt/Equity ratio	7.41	7.41
Cost of debt	5.00%	6.50%

After-tax WACC	3.6%	4.4%


Selected WACC	4.0%

8532.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 8532.HK:

cost_of_equity (5.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.13) + 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.