984.HK WACC - Weighted Average Cost of Capital

The WACC of AEON Stores Hong Kong Co Ltd (984.HK) is 6.7%.

The Cost of Equity of AEON Stores Hong Kong Co Ltd (984.HK) is 12.90%.

The Cost of Debt of AEON Stores Hong Kong Co Ltd (984.HK) is 6.65%.

	Range	Selected
Cost of equity	9.60% - 16.20%	12.90%
Tax rate	2.00% - 2.50%	2.25%
Cost of debt	6.30% - 7.00%	6.65%
WACC	6.3% - 7.1%	6.7%

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	1.12	1.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.60%	16.20%

Tax rate	2.00%	2.50%
Debt/Equity ratio	40.02	40.02
Cost of debt	6.30%	7.00%

After-tax WACC	6.3%	7.1%


Selected WACC	6.7%

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 (12.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.12) + 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.