8547.HK WACC - Weighted Average Cost of Capital

The WACC of Pacific Legend Group Ltd (8547.HK) is 7.0%.

The Cost of Equity of Pacific Legend Group Ltd (8547.HK) is 6.60%.

The Cost of Debt of Pacific Legend Group Ltd (8547.HK) is 8.50%.

	Range	Selected
Cost of equity	5.60% - 7.60%	6.60%
Tax rate	-% - 0.10%	0.05%
Cost of debt	5.60% - 11.40%	8.50%
WACC	5.6% - 8.5%	7.0%

WACC

8547.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.46	0.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	7.60%

Tax rate	-%	0.10%
Debt/Equity ratio	0.3	0.3
Cost of debt	5.60%	11.40%

After-tax WACC	5.6%	8.5%


Selected WACC	7.0%

8547.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 8547.HK:

cost_of_equity (6.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.46) + 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.