9919.HK WACC - Weighted Average Cost of Capital

The WACC of Activation Group Holdings Ltd (9919.HK) is 9.6%.

The Cost of Equity of Activation Group Holdings Ltd (9919.HK) is 9.65%.

The Cost of Debt of Activation Group Holdings Ltd (9919.HK) is 4.65%.

	Range	Selected
Cost of equity	6.70% - 12.60%	9.65%
Tax rate	28.70% - 31.30%	30.00%
Cost of debt	4.00% - 5.30%	4.65%
WACC	6.7% - 12.5%	9.6%

WACC

9919.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.64	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	12.60%

Tax rate	28.70%	31.30%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	5.30%

After-tax WACC	6.7%	12.5%


Selected WACC	9.6%

9919.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 9919.HK:

cost_of_equity (9.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.