8621.HK WACC - Weighted Average Cost of Capital

The WACC of Metropolis Capital Holdings Ltd (8621.HK) is 6.7%.

The Cost of Equity of Metropolis Capital Holdings Ltd (8621.HK) is 6.55%.

The Cost of Debt of Metropolis Capital Holdings Ltd (8621.HK) is 8.90%.

	Range	Selected
Cost of equity	5.30% - 7.80%	6.55%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	7.00% - 10.80%	8.90%
WACC	5.4% - 8.1%	6.7%

WACC

8621.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.24	0.42

Additional risk adjustments	1.0%	1.5%
Cost of equity	5.30%	7.80%

Tax rate	22.10%	22.30%
Debt/Equity ratio	1	1
Cost of debt	7.00%	10.80%

After-tax WACC	5.4%	8.1%


Selected WACC	6.7%

8621.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 8621.HK:

cost_of_equity (6.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.24) + risk_adjustments (1.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.