959.HK WACC - Weighted Average Cost of Capital

The WACC of Century Entertainment International Holdings Ltd (959.HK) is 6.7%.

The Cost of Equity of Century Entertainment International Holdings Ltd (959.HK) is 10.65%.

The Cost of Debt of Century Entertainment International Holdings Ltd (959.HK) is 5.00%.

	Range	Selected
Cost of equity	7.80% - 13.50%	10.65%
Tax rate	0.70% - 2.50%	1.60%
Cost of debt	5.00% - 5.00%	5.00%
WACC	5.8% - 7.5%	6.7%

WACC

959.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.83	1.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.80%	13.50%

Tax rate	0.70%	2.50%
Debt/Equity ratio	2.31	2.31
Cost of debt	5.00%	5.00%

After-tax WACC	5.8%	7.5%


Selected WACC	6.7%

959.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 959.HK:

cost_of_equity (10.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.