869.HK WACC - Weighted Average Cost of Capital

The WACC of Playmates Toys Ltd (869.HK) is 8.0%.

The Cost of Equity of Playmates Toys Ltd (869.HK) is 8.15%.

The Cost of Debt of Playmates Toys Ltd (869.HK) is 5.00%.

	Range	Selected
Cost of equity	6.20% - 10.10%	8.15%
Tax rate	30.40% - 33.60%	32.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.1% - 9.9%	8.0%

WACC

869.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.55	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	10.10%

Tax rate	30.40%	33.60%
Debt/Equity ratio	0.02	0.02
Cost of debt	5.00%	5.00%

After-tax WACC	6.1%	9.9%


Selected WACC	8.0%

869.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 869.HK:

cost_of_equity (8.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.