983.HK WACC - Weighted Average Cost of Capital

The WACC of SOCAM Development Ltd (983.HK) is 11.1%.

The Cost of Equity of SOCAM Development Ltd (983.HK) is 7.20%.

The Cost of Debt of SOCAM Development Ltd (983.HK) is 14.45%.

	Range	Selected
Cost of equity	5.90% - 8.50%	7.20%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	6.00% - 22.90%	14.45%
WACC	4.7% - 17.4%	11.1%

WACC

983.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.5	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	8.50%

Tax rate	22.10%	22.30%
Debt/Equity ratio	26.04	26.04
Cost of debt	6.00%	22.90%

After-tax WACC	4.7%	17.4%


Selected WACC	11.1%

983.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 983.HK:

cost_of_equity (7.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.