8535.HK WACC - Weighted Average Cost of Capital

The WACC of Vistar Holdings Ltd (8535.HK) is 5.7%.

The Cost of Equity of Vistar Holdings Ltd (8535.HK) is 6.25%.

The Cost of Debt of Vistar Holdings Ltd (8535.HK) is 5.40%.

	Range	Selected
Cost of equity	5.30% - 7.20%	6.25%
Tax rate	14.60% - 16.90%	15.75%
Cost of debt	4.60% - 6.20%	5.40%
WACC	4.9% - 6.5%	5.7%

WACC

8535.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.41	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	7.20%

Tax rate	14.60%	16.90%
Debt/Equity ratio	0.5	0.5
Cost of debt	4.60%	6.20%

After-tax WACC	4.9%	6.5%


Selected WACC	5.7%

8535.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 8535.HK:

cost_of_equity (6.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.