984.HK WACC - Weighted Average Cost of Capital

The WACC of AEON Stores Hong Kong Co Ltd (984.HK) is 6.4%.

The Cost of Equity of AEON Stores Hong Kong Co Ltd (984.HK) is 11.60%.

The Cost of Debt of AEON Stores Hong Kong Co Ltd (984.HK) is 6.40%.

	Range	Selected
Cost of equity	9.10% - 14.10%	11.60%
Tax rate	2.00% - 2.50%	2.25%
Cost of debt	5.80% - 7.00%	6.40%
WACC	5.8% - 7.0%	6.4%

WACC

984.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.04	1.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	14.10%

Tax rate	2.00%	2.50%
Debt/Equity ratio	37.38	37.38
Cost of debt	5.80%	7.00%

After-tax WACC	5.8%	7.0%


Selected WACC	6.4%

984.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 984.HK:

cost_of_equity (11.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.04) + 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.