938.HK WACC - Weighted Average Cost of Capital

The WACC of Man Sang International Ltd (938.HK) is 4.5%.

The Cost of Equity of Man Sang International Ltd (938.HK) is 5.85%.

The Cost of Debt of Man Sang International Ltd (938.HK) is 4.25%.

	Range	Selected
Cost of equity	5.10% - 6.60%	5.85%
Tax rate	0.80% - 1.00%	0.90%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.2% - 4.9%	4.5%

WACC

938.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.38	0.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	6.60%

Tax rate	0.80%	1.00%
Debt/Equity ratio	4.13	4.13
Cost of debt	4.00%	4.50%

After-tax WACC	4.2%	4.9%


Selected WACC	4.5%

938.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 938.HK:

cost_of_equity (5.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.38) + 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.