953.HK WACC - Weighted Average Cost of Capital

The WACC of Shaw Brothers Holdings Ltd (953.HK) is 5.7%.

The Cost of Equity of Shaw Brothers Holdings Ltd (953.HK) is 5.55%.

The Cost of Debt of Shaw Brothers Holdings Ltd (953.HK) is 11.75%.

	Range	Selected
Cost of equity	4.90% - 6.20%	5.55%
Tax rate	17.30% - 25.10%	21.20%
Cost of debt	7.00% - 16.50%	11.75%
WACC	4.9% - 6.4%	5.7%

WACC

953.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.33	0.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.90%	6.20%

Tax rate	17.30%	25.10%
Debt/Equity ratio	0.03	0.03
Cost of debt	7.00%	16.50%

After-tax WACC	4.9%	6.4%


Selected WACC	5.7%

953.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 953.HK:

cost_of_equity (5.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + 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.