97.HK WACC - Weighted Average Cost of Capital

The WACC of Henderson Investment Ltd (97.HK) is 6.2%.

The Cost of Equity of Henderson Investment Ltd (97.HK) is 7.80%.

The Cost of Debt of Henderson Investment Ltd (97.HK) is 6.15%.

	Range	Selected
Cost of equity	5.90% - 9.70%	7.80%
Tax rate	14.00% - 16.40%	15.20%
Cost of debt	5.30% - 7.00%	6.15%
WACC	5.1% - 7.4%	6.2%

WACC

97.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.51	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	9.70%

Tax rate	14.00%	16.40%
Debt/Equity ratio	1.56	1.56
Cost of debt	5.30%	7.00%

After-tax WACC	5.1%	7.4%


Selected WACC	6.2%

97.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 97.HK:

cost_of_equity (7.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.51) + 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.