886.HK WACC - Weighted Average Cost of Capital

The WACC of Silver Base Group Holdings Ltd (886.HK) is 7.2%.

The Cost of Equity of Silver Base Group Holdings Ltd (886.HK) is 8.15%.

The Cost of Debt of Silver Base Group Holdings Ltd (886.HK) is 7.30%.

	Range	Selected
Cost of equity	5.80% - 10.50%	8.15%
Tax rate	1.60% - 2.40%	2.00%
Cost of debt	7.00% - 7.60%	7.30%
WACC	6.8% - 7.7%	7.2%

WACC

886.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.49	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.80%	10.50%

Tax rate	1.60%	2.40%
Debt/Equity ratio	13.73	13.73
Cost of debt	7.00%	7.60%

After-tax WACC	6.8%	7.7%


Selected WACC	7.2%

886.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 886.HK:

cost_of_equity (8.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.49) + 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.