970.HK WACC - Weighted Average Cost of Capital
The WACC of Sparkle Roll Group Ltd (970.HK) is 7.0%.
| Range | Selected | |
| Cost of equity | 10.9% - 18.1% | 14.5% |
| Tax rate | 14.7% - 37.6% | 26.15% |
| Cost of debt | 6.7% - 7.0% | 6.85% |
| WACC | 6.8% - 7.3% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.34 | 2.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.9% | 18.1% |
| Tax rate | 14.7% | 37.6% |
| Debt/Equity ratio | 3.71 | 3.71 |
| Cost of debt | 6.7% | 7.0% |
| After-tax WACC | 6.8% | 7.3% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 970.HK | Sparkle Roll Group Ltd | 3.71 | -0.26 | -0.06 |
| 2031.HK | Ausupreme International Holdings Ltd | 0.06 | -0.02 | -0.02 |
| 335.HK | Upbest Group Ltd | 0.06 | 0.67 | 0.64 |
| 370.HK | China Best Group Holding Ltd | 0.1 | 0.87 | 0.8 |
| 620.HK | DTXS Silk Road Investment Holdings Co Ltd | 8.34 | -0.02 | 0 |
| 8072.T | Japan Publications Trading Co Ltd | 0.6 | 1.39 | 0.93 |
| 8119.T | Sanyei Corp | 0.51 | 0.25 | 0.17 |
| 8200.HK | Sau San Tong Holdings Ltd | 0.27 | 0.61 | 0.5 |
| 915.HK | Daohe Global Group Ltd | 0.2 | 1.14 | 0.99 |
| O08.SI | Ossia International Ltd | 0.06 | 0.66 | 0.62 |
| Low | High | |
| Unlevered beta | 0.37 | 0.63 |
| Relevered beta | 1.51 | 2.55 |
| Adjusted relevered beta | 1.34 | 2.04 |
970.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 970.HK:
cost_of_equity (14.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.34) + 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.