8540.HK WACC - Weighted Average Cost of Capital
The WACC of Victory Securities (Holdings) Company Ltd (8540.HK) is 6.5%.
| Range | Selected | |
| Cost of equity | 5.1% - 7.4% | 6.25% |
| Tax rate | 10.9% - 13.1% | 12% |
| Cost of debt | 4.1% - 14.6% | 9.35% |
| WACC | 4.9% - 8.1% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.38 | 0.51 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 7.4% |
| Tax rate | 10.9% | 13.1% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 4.1% | 14.6% |
| After-tax WACC | 4.9% | 8.1% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8540.HK | Victory Securities (Holdings) Company Ltd | 0.16 | 0.17 | 0.15 |
| 2263.HK | Fu Shek Financial Holdings Ltd | 0.01 | 0.52 | 0.52 |
| 290.HK | China Fortune Financial Group Ltd | 0 | 0.05 | 0.05 |
| 397.HK | Power Financial Group Ltd | 0.17 | 0.4 | 0.35 |
| 619.HK | South China Financial Holdings Ltd | 5.52 | 0.45 | 0.08 |
| 8001.HK | Orient Securities International Holdings Ltd | 0.01 | -1.73 | -1.71 |
| 8098.HK | CL Group (Holdings) Ltd | 0.29 | 0 | 0 |
| 8168.HK | Amasse Capital Holdings Ltd | 0.03 | 0.02 | 0.02 |
| 8333.HK | Astrum Financial Holdings Ltd | 0.2 | 0.48 | 0.41 |
| 8350.HK | Excalibur Global Financial Holdings Ltd | 0.31 | 0.6 | 0.48 |
| Low | High | |
| Unlevered beta | 0.07 | 0.23 |
| Relevered beta | 0.07 | 0.27 |
| Adjusted relevered beta | 0.38 | 0.51 |
8540.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 8540.HK:
cost_of_equity (6.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.