8627.HK WACC - Weighted Average Cost of Capital

The WACC of Orange Tour Cultural Holding Ltd (8627.HK) is 10.0%.

The Cost of Equity of Orange Tour Cultural Holding Ltd (8627.HK) is 10.50%.

The Cost of Debt of Orange Tour Cultural Holding Ltd (8627.HK) is 7.00%.

	Range	Selected
Cost of equity	8.60% - 12.40%	10.50%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	7.00% - 7.00%	7.00%
WACC	8.3% - 11.8%	10.0%

WACC

8627.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.96	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	12.40%

Tax rate	22.10%	22.30%
Debt/Equity ratio	0.11	0.11
Cost of debt	7.00%	7.00%

After-tax WACC	8.3%	11.8%


Selected WACC	10.0%

8627.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 8627.HK:

cost_of_equity (10.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.96) + 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.