8631.HK WACC - Weighted Average Cost of Capital

The WACC of Sun Kong Holdings Ltd (8631.HK) is 5.2%.

The Cost of Equity of Sun Kong Holdings Ltd (8631.HK) is 5.65%.

The Cost of Debt of Sun Kong Holdings Ltd (8631.HK) is 5.20%.

	Range	Selected
Cost of equity	4.80% - 6.50%	5.65%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	4.00% - 6.40%	5.20%
WACC	4.4% - 6.1%	5.2%

WACC

8631.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.32	0.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.50%

Tax rate	22.10%	22.30%
Debt/Equity ratio	0.34	0.34
Cost of debt	4.00%	6.40%

After-tax WACC	4.4%	6.1%


Selected WACC	5.2%

8631.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 8631.HK:

cost_of_equity (5.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.32) + 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.