8659.HK WACC - Weighted Average Cost of Capital

The WACC of Yik Wo International Holdings Ltd (8659.HK) is 8.7%.

The Cost of Equity of Yik Wo International Holdings Ltd (8659.HK) is 8.80%.

The Cost of Debt of Yik Wo International Holdings Ltd (8659.HK) is 4.55%.

	Range	Selected
Cost of equity	6.90% - 10.70%	8.80%
Tax rate	31.60% - 33.90%	32.75%
Cost of debt	4.00% - 5.10%	4.55%
WACC	6.8% - 10.5%	8.7%

WACC

8659.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.68	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	10.70%

Tax rate	31.60%	33.90%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	5.10%

After-tax WACC	6.8%	10.5%


Selected WACC	8.7%

8659.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 8659.HK:

cost_of_equity (8.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.68) + 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.